27% workers show ‘little confidence’ in receiving pension

Data has revealed that half of UK workers won’t be able to retire after they turn 66, as more and more employees lack confidence in their state pensions system.

Research carried out by Alight Solutions in collaboration with the University of Granada, found that one in four (27%) workers across Europe have ‘little confidence’ that they will receive a pension when they retire.

Two-thirds added that their pension pots will not be enough, which will likely force a drop in their standard of living.

Alight’s Retirement Perception Index surveyed 2,400 employees in companies across multiple sectors from the UK, Germany, France, Italy, Spain and the Netherlands.

29% of workers added that they won’t have enough pension funds available to maintain a satisfactory standard of living at time of retirement.

Elsewhere, half of those surveyed agreed that they won’t be able to retire until after 66, the age when people can start claiming the state pension in the UK.

A lack in confidence in receiving state pensions was highest among workers in Italy (38%) followed by Germany (32%), Spain (30%), the UK (25%) and France (24%).

In contrast, Dutch employees had the highest confidence, however the index suggests that this could be due to them having a better understanding of their pension systems.

The data revealed different confidence levels among different generations too, for example baby boomers had the highest confidence, while gen Zs have a much higher level of uncertainty.

Calls for more advice

Workers based in Europe are looking to their organisation for more help and advice, which could make all the difference to attracting and retaining talent.

This is reflected in the figures as 52% of respondents indicated that they would be interested in working for firms that can offer them professional advice on how to better manage their pension plans.

UK employees are also the most interested in employer-provided retirement contributions and advice on managing retirement savings. This may come as no surprise, as 47% of those surveyed said they already receive additional retirement contributions from their company.

Luca Saracino, international growth leader at Alight International, revealed: “Our economic landscape and workforces are constantly changing, and so should our approach in providing a modern employee experience that covers all needs.

“As our population ages, employers cannot do without a defined benefit plan that spotlights pension support. It goes a long way in helping workers save time and money, invest, and plan smarter.

“Design the right, inclusive policies and provide updated information and savvy tools that gives your people the confidence to retire. Such initiatives will not only attract and retain talent, but also reinforce the importance of retirement planning.”

Workplace pensions will be discussed during Global Payroll Question Time this week. Save your free space here.