Almost two thirds, 65 per cent, of respondents to a recent study have said that they want a level of flexibility in their pension options, it has been revealed.

In its new research report ‘The Saving Psyche of the UK’, Willis Towers Watson and Nottingham University Business School noted a significant need for employers and the pensions industry to tailor communication in order to increase employee engagement with their pension saving options.

The study, which looked at almost 2,000 workers of varying ages across the UK, found that 42 per cent of Brits are more concerned about enjoying their life in the present rather than considering their future, long term savings.

In addition, 35 per cent of savers said that they would prefer to have a good standard of living today rather than for retirement and 37 per cent said they find it more satisfying to spend money than save for the long term.

A larger proportion of respondents, 55 per cent, also stated that they are focusing on short term saving for holidays, rather than putting savings aside for retirement, 47 per cent.

The research categorised the types of savers into six categories. This included: apathetic savers, 27 per cent, who lack knowledge about financial decisions with low understanding, Suburban savers, 19 per cent, practical planners who save the highest proportion of monthly savings with solid knowledge, financial worriers, 14 per cent, who fret about short and long term finances and struggle to make financial decisions.

Also, short term savers, 15 per cent, who worry about their financial future, who are likely to be part of a pension scheme but are more concerned about saving for holidays and short term motivations, You only live one, 15 per cent which tend to be younger with high level of wealth but not the best savers and finally, risk takers, 14 per cent, that never experience debt or financial problems and are good at saving.

Willis Towers Watson’s master trust LifeSight UK’s managing director Jo Kite said: Our report highlights the need for employers to truly understand their workforce and create a relevant engagement strategy to incentivise saving for each persona within the company to help improve their overall long term financial wellbeing.”

Nottingham University Business School professor of Financial Decision Making at the Centre for Risk, Banking and Financial Services, James Devlin added: “There are a lot of aspects of behavioural economics which could help the pensions industry engage with savers more effectively. A “one size fits all” approach is unlikely to be successful as different methods and messages will appeal to the different persona types identified. […] Short Term savers need help in thinking for the long term. Encouraging them to think in terms of separate “pots” of money, a “mental accounting” approach as behavioural economists would call it, may encourage Short term savers to put a little more aside for the longer term.”

Kite concluded: “Our research shows that half of respondents do worry about their financial future, but yet are doing little about it. Employees have widely varying incomes and priorities, and as such engage with information and saving options differently.

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