Retirement ‘worries younger UK workers’

Young office workers
By Alec Mackenzie, The CA magazine

4 February 2016

Report finds the financial future is not so bright for employees in their 30s.

Almost three-quarters of UK employees believe they face a less comfortable retirement than their parents’ generation, according to a recent study by professional services firm, Willis Towers Watson.

The 2015 Global Benefits Attitudes Survey found that while 60 per cent of people in their 50s are unworried about their immediate or long-term finances, employees in their 30s are the most likely to be worried about both, with 20 per cent seen as ‘struggling’.

The study of over 30,000 private sector employees in 19 countries found that the average age at which UK employees predict they will retire is just over 65 years old.

Despite this, many were pessimistic about how long their retirement savings will last, with 39 per cent thinking their money will run out 15 years into retirement, while over half (55 per cent) believe it will be gone within 25 years.

Younger employees are particularly concerned about their financial situation.

Minh Tran, senior consultant at Willis Towers Watson, said: “Employees overwhelmingly anticipate less wealth in their retirement, compared with their parents’ generation.

“Younger employees are particularly concerned about their financial situation. The immediate financial priorities facing employees in their 20s and 30s – including student debt, housing deposits and childcare costs – can make it difficult to prioritise long-term issues such as retirement savings.”

For those with financial concerns, the impact can be damaging and 39 per cent of people admitted that struggling with their finances stops them from performing at their best at work.

In addition, these financial worries can also be associated with higher levels of absenteeism. The report found that people who are unworried about their finances reported they took an average of three absence days from work per year, while employees who are struggling financially are absent for an average of seven days per year.

Nevertheless, despite concerns about current and future finances, the research found that financial satisfaction has actually increased in the last two years.

More than half (52 per cent) of UK employees were satisfied with their financial situation at that time, significantly higher than the 42 per cent who answered positively in 2013.

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