Employers are viewing the ageing workforce as increasingly important, according to the new Financial Wellbeing Research 2023[1] from the Reward & Employee Benefits Association (REBA) in association with WEALTH at work.
It found that over a quarter (29%) of employers cite an ageing workforce as a driver of change to their strategy in the next two years, compared with just 11% in the past two years.
It also revealed that 17% cite age 55+ employees accessing their pension early as a driver, up from 11% previously. Alongside this, research from WEALTH at work[2] found that one in 10 (10%) working adults have already withdrawn pensions savings earlier than previously intended to supplement their income. But, worryingly, 31% either intend to, or may consider it in the future.
The current economy is also found to be causing concerns over employees’ future retirement plans. WEALTH at work’s research found that one in three (33%) working adults think they won’t ever be able to afford to retire at all due to increasing costs, and 8 in 10 (83%) are concerned that the cost-of-living crisis will mean they will have to work longer before retiring to make up for a shortfall in savings.
This could perhaps be why 159% more employers plan to offer employees aged over 55 targeted support for financial wellbeing; 17% claim to have taken action to provide this in the past two years, whilst 44% plan to do so in the next two years[1].
The survey also reveals significant growth in interest in mid-life MOTs, which offer employees education and guidance to help them plan for their later working lives and retirement. Over a quarter (29%) of employer’s plan to offer this support in the next two years in addition to the 8% that already do so.
Jonathan Watts-Lay, Director, WEALTH at work, comments; “We spend many years saving for our retirement, so it’s important that employees receive the support needed for them to be able to make informed choices about their retirement plans, and to help them think about if retirement is really achievable for them which can be particularly difficult in the current environment.”
He adds; “In fact, some are concerned if they really can afford to retire at all, and many believe that they will have to work longer to make up for a shortfall in savings.
There are also others who are considering dipping into their pensions early to alleviate current financial pressures. However, this really should be a last resort and employees must understand the dramatic impact this will have on their retirement savings to be used in later life. For those approaching retirement, it couldn’t be more important to make sure they have a plan in place.”
Watts-Lay comments; “Many leading companies provide financial education, guidance and regulated financial advice for their employees to help them understand key issues as they approach retirement. This type of support is needed now more than ever.”