By Matt Ritchie
Pensions remain the savings vehicle of choice for older workers, though younger staff tend to prefer cash savings according to new research from Mercer.
Data from the consultancy’s surveys of employers and employees has shown that pensions are favoured by 65 per cent and 69 per cent of 45 to 54 and 55 to 64 year olds, respectively.
Conversely, cash savings were the most popular with 16 to 24 year olds and 25 to 34 year olds, with 32 per cent and 28 per cent of the age groups favouring the vehicles, respectively.
Although 21 per cent of staff would like the option of saving into cash accounts and 9 per cent would like access to corporate cash ISAs, just 2 per cent of employers offered such products to their staff.
DC expert in Mercer’s retirement business Gail Philippart said the figures illustrated a “clear gap” between what employees wanted and what they were offered.
“Employees’ needs are evolving and will change as they progress through their working life. To become the employer of choice companies need to listen to what their staff need and meet those needs with benefits that are appropriate and will be valued by staff.”
Philippart said many employees now entering the work force are steeped in student debt with “little chance of getting on the housing ladder anytime soon”, so offering them the choice of paying down student debt or saving for a deposit on a house through a savings option is a good staff retention tool.
“Pensions should still be the key savings tool for retirement, and the fact that such a large proportion of employees highly value their schemes is encouraging to see. However employees also want something that will help them with their short and medium term savings needs and feel there would be advantage in this being available through the workplace.”