Pensions & employee benefits roundup - July 2018
While an increasing share of young employees are now saving enough for retirement, a fifth of young employees are saving nothing at all.
According to research from Scottish Widows 39% of UK workers between 22 and 29 are now saving enough for retirement, which is an increase of 9% from the research conducted in 2017 that saw 30% of the age group saving adequately. At the same time however, 21% or young people are saving nothing for their retirement, and with a further 20% saving seriously less than 12% of their income.
Our research has found that younger employees put a lot of their attention towards more immediate priorities that feel more relevant to their current situation in life. For example, 19.2% of employees aged 16 to 34 say that they would rather use the money to save for a mortgage while just 0.9% of over 55 year olds agree. Furthermore, 23.5% of 16-34 year olds mentioned other financial priorities, such as paying for holidays, a new car, or home improvements, as a reason not to increase their pension saving, compared to only 15.7% of over 55 year olds.
One reason for this is that young people is that saving for the more immediate priorities feels more tangible than saving for something where the payoff is so far in the future – for many young employees, more than 50 years away. In our survey, 44.4% of 16-34 year olds said that they feel that retirement is a long way off and something they can worry about later. However, 31.1% disagreed with the statement.
Saving for retirement can feel like a distant thought to many young workers. However, it is important to get people saving from as early on as possible in order to be able to build an adequate savings pot and fully benefit from the power of compound interest.
60.7% of employees aged 16-34 say that they would be more willing to save into a pension if they had a better idea of how a pension scheme works – meaning that employers have a great opportunity to support their workforce by providing them information and guidance.
Throughout the month our research team keep a close eye on what is happening in the pensions and employee benefits industries. Here is a roundup of the best news articles and stories for June 2018.
The number of under 30s saving enough for retirement has risen sharply by 9%, according to research from Scottish Widows.
Workers in the North of England are most likely to opt out of pension saving
NOW:Pensions, 13 June
Analysis of workplace pension provider NOW: Pensions’ 1.7 million members has revealed that its members in the North of England are most likely to opt out of auto enrolment and may be heading for poverty in retirement.
Only one in five approaching retirement on target
Aegon, 14 June
Research by Aegon reveals that 38% of individuals are not confident about their ability to retire comfortably with many in the dark when it comes to their pension savings and arrangements for funding their retirement.
Millennials are to become the first generation to have worse health problems than their parents when they reach middle age, according to a new study.
3 in 4 employees will work beyond 65
Canada Life, 20 June
Three in four employees will work beyond 65 as rising cost of living and poor returns on savings takes its toll.
People with longstanding mental health problems more than twice as likely to be in poverty as those without a longstanding health problem
Institute for Fiscal Studies, 20 June
Among 25-54 year-olds, 28% of those with a longstanding health problem, and 40% of those with a mental health problem, are in relative poverty (i.e. they have an income below 60% of the median income after deducting housing costs).
In an age of always being ‘online’, a quarter (26%) of employees find working outside of traditional working hours harms their mental wellbeing, according to research from Lockton.
British Lung Foundation, 22 June
Twenty three per cent of Brits say they never exercise. In a study of 2,000 Brits almost one in four said they avoid exercise at all costs. And of the 77 per cent who do exercise, 16 per cent only exert themselves once a week.
Mental health misconceptions causing 1 in 4 to delay seeking help
Bupa, 25 June
The majority of people in the UK struggle to identify the symptoms of common mental health conditions, which is resulting in treatment delays for millions.
Employer spending on taxable benefits for staff record high
People Management, 29 June
Employers are providing a greater value of taxable benefits to their staff than ever before, according to new figures from HMRC.
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