A new survey from Aviva has discovered that nearly half (47%) of workers do not know how to plan for their retirement and women are almost twice as likely as men to feel completely “on the back foot” with preparing and saving for their later years.
The findings have been released after nearly a decade of employers automatically enrolling their employees into workplace pensions and highlighted how just 27 per cent of people are confident they know what a “good” amount is to have in their pension for someone their age.
Four in 10 (39%) workers aged 40 to 54 have pushed thinking about retirement to the back of their minds.
Commenting on the findings, Mary Harper, managing director of Aviva Financial Advice, said: “Our research shows that employers have a key role to play in filling the pensions preparedness vacuum.
“Access to a combination of information, guidance and advice via the workplace can help people make the most of their money for the long-term.”
Aviva is calling for a “living pension” accreditation to be created – the pension equivalent to the living wage – to help businesses ensure their workplace pension supports a minimum standard of living in retirement.
The findings were released as part of a rolling study in which 6,000 employees and 3,000 employers in total have been surveyed across three waves.
Aviva’s tips to help boost your pension pot
1. Look into your current pension statements to find out how much you have saved already. Do not forget to find out when you will be eligible for the State Pension and check how much support you are forecast to receive.
2. Employers are legally required to offer a workplace pension for those who meet the auto-enrolment criteria. They are subject to tax relief, your employer has to top it up by at least 3% of your pensionable earnings and you will never lose it, even if you only stay in the job for a short amount of time. For those who do not meet the criteria there may still be options available, which you can find out more about from your employer.
3. Use online planning tools. Aviva’s, for example, gives an overview of what your retirement income could be based on how much you are currently saving – similar tools are also available from other pension providers.
4. Find lost pension pots. The UK Government offers a pension tracing service. You may also be able to combine smaller pensions into one larger pension pot, which may make it easier to manage your investments. You should consider the charges and investment choice offered by the different plans, as well as any valuable or safeguarded benefits that could be lost, when weighing up whether to combine your pots together.
5. Ask your employer whether they offer any education sessions or appointments with financial advisers to help you plan for your future retirement.
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