Funding retirement remains primary financial worry for UK workers

Funding retirement continues to be the most commonly cited financial worry for UK employees, with 34 per cent naming it as their top money concern, research from Close Brothers has revealed.

Having sufficient income in retirement was found to be the biggest financial worry for the second year running in Close Brothers’ Financial Wellbeing Index.

The proportion of people citing it as their primary concern increased from 2019, when 31 per cent said it was their top money worry.

Those aged between 55 and 64 were the most cohort, with 50 per cent citing it as one of their biggest financial worries, while 44 per cent of those aged over 65 identified it as one of their key concerns.

Despite this, the average score respondents gave as to how confident they were about funding their retirement increased year-on-year, from 5 out of 10 to 5.9 out of 10, rising from 5.7 to 6.5 for men and from 4.2 to 5.4 for women.

For those who scored their confidence in funding for retirement below 5 out of 10, 46 per cent said they would never be confident and 62 per cent of those aged over 55 believed their concern would never be resolved.

Close Brothers’ report found that three-quarters of those aged 55+ had a workplace pension, compared to 67 per cent of people aged 35-54 and 44 per cent of 18-34-year olds.

Nearly nine in 10 (88 per cent) employees said they save into their pension, while 39 per cent save the maximum they can afford on a consistent basis. This rises to almost half (47%) of those aged 55 and over.

Just under a third (31 per cent) of workers save the minimum amount necessary, while 8 per cent were doing nothing to save for retirement, rising to 16 per cent for those aged 18-24.

”Since the introduction of auto-enrolment in 2012 and the huge amount of added focus on the need for pension savings and retirement planning since then, it is concerning that retirement still tops the list of money worries. This is unlikely to abate in the short term given the current uncertain economic climate,” commented Close Brothers head of financial education, Jeanette Makings.

“While it’s good news that financial confidence around retirement has increased since last year, the UK’s pension problem looms larger than ever, with Covid-19 having led to a dent in the market and so people’s pensions and other savings.

“Against such a backdrop, it’s vital that people take stock of their financial futures and see what steps they can take to adjust their plans to meet their short-, medium-, and long-term goals.

“Employers have a key role to play in supporting employees to understand and make good retirement planning choices throughout their career as well as when approaching retirement.”

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