Most South Africans haven’t saved enough for their retirement years – but neither have many in other countries. A new study by Willis Towers Watson in the UK highlights how worried British workers are about financial security in old age.
Over one-in-five (21%) people in the UK believe they will now need to wait at least until their 70s before they retire, including a small minority (3%) who do not believe they will ever be able to retire, according to a major new study of UK employees by Willis Towers Watson.
The Global Benefits Attitudes Survey interviewed 1 895 UK workers on their retirement plans and found that employees expecting to work longer are less healthy, more stressed and less engaged than those who expect to retire earlier. Over half (51%) of those expecting to retire after 70 have high or above average stress levels, compared to just a third (36%) of those planning to retire at 65.
For those resigned to retiring after 70, 30% state they are in poor or fair health, double (16%) those expecting to retire at 65 who feel the same about their health.
Fiona Matthews, Managing Director of LifeSight, Willis Towers Watson’s master trust, commented: “These new figures put into sharp focus the worries that British workers have about their long term savings and financial security in old age. This is already causing stress and having a negative impact on their health. Although employment levels are good and wages are rising, many employees are worried about long term financial stability. They are anticipating longer careers and for many working longer is the only way to achieve security in retirement.”
The study also shows a significant difference in expectations between genders when it comes to retirement. It reveals that more women expect to retire aged 70 or over than men (25% of women, 19% of men). Amongst the younger generation the difference is glaring – only 37% of women in their 20s are confident that they will have enough saved to live comfortably for 25 years in retirement. This compares to 56% of men in the same age group.
Matthews continues: “British employers need to understand their employees’ differing concerns, needs and lifestyles to help them build a tailored retirement plan. The recent pension reforms and Financial Advice Market Review are all adding to the pressure for employers to provide good quality pensions and retirement planning for staff. Employers face a potential challenge if employees extend their careers and productivity declines. This survey certainly provides more evidence that there is a long way to go before people can be confident of a financially secure retirement.”
Other findings include:
- 30% of people under 40 think they’ll retire in their 70s or later, dropping to 15% in their 40s and just 12% in their 50s
- Two-thirds of people (66%) who are struggling financially expect to work beyond 65 compared to 28% of people who are unworried about their finances
- Since 2001 the percentage of men over the age of 65 in work has doubled from 7% to 13% today
- Three-quarters (73%) of people will rely on their employer pension plan as the primary source of retirement income
- Despite the high numbers of people expecting to work beyond the traditional retirement age of 65, the number anticipating early retirement (under 65) has actually increased since 2013 from 29% to 37%.