Nearly a quarter of workers looking to employers for pension guidance

Almost a quarter (23 per cent) of employees consider their employer the greatest source of guidance for their pension, a report from Royal London has revealed.

The report, The Future of Auto Enrolment – Building on 10 years of success, revealed that an employee was the third most trusted source of guidance for planning their pension, behind family or friends (35 per cent) and a professional financial adviser (28 per cent).

Of all age groups surveyed, workers aged 18-34 were most likely to see their employer as a great source of guidance for long-term financial planning (27 per cent).

In contrast, the three least trusted sources of pension planning information were financial blogs/social media posts (11 per cent), colleagues (10 per cent), and mainstream press (7 per cent).

Despite this, the report found that the use of social media for retirement planning is on the rise, with one in seven (13 per cent) workers looking to social platforms to help inform their retirement needs.

This increased to more than one in five (22 per cent) for those aged 18-34-years, with the report noting that reliance on social media "unsurprisingly" varies significantly between generations with only 3 per cent of those aged 55 and over seeking retirement information on social media.

Instead, individuals over the age of 55 favour discussions with professional advisers, with 33 per cent having used an adviser to help them understand how much they will need in retirement, while 39 per cent consider professional advice the greatest source of guidance for long-term financial planning.

Royal London highlighted the findings as demonstration of the role employers can play in
helping workers through their retirement journey, with previous findings from the survey revealing that 37 per cent of UK workers don’t feel confident they will have a secure income for the duration of their retirement,

In addition to this, the report revealed that, despite “progress” being made by automatic enrolment, affordability remains a key barrier for employees to save into their pension.

It was discovered that 34 per cent of UK workers who have opted out of their workplace’s pension scheme reported opted out because they felt they were unable to afford regular contributions.

This was ahead of not expecting to stay with the employer for a meaningful length of time (referenced by 23 per cent of respondents) and feeling as if the money could be put to better use in other pension arrangements (19 per cent).

Royal London pensions expert, Clare Moffat, commented: “Employers should reflect on the fact that many of their employees trust and value their guidance when it comes to long-term financial planning.

“Whilst social media can be great at amplifying the conversation on retirement planning, and encouraging people to engage with their savings, you should not exclusively rely on it to help plan for your future.

“Employers’ clear position of influence shows they too are seen by employees as a good source of retirement guidance. They should be driving pensions awareness and understanding amongst their workers to help them achieve the retirement lifestyle they want.

“Encouraging workers to continue saving is now more important than ever given the current cost of living challenges.

"Making cutbacks to regular pensions contributions may seem like a necessary option in the short-term but these contributions should be restarted as soon as it’s financially possible.

"Reducing or stopping contributions now will mean that you have less to live on in retirement or that you’ll have to retire later than planned.”

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