Funding retirement remains UK’s biggest money worry, study reveals

Funding retirement is the biggest money worry for employees in the UK, according to a new report from Close Brothers.

The banking group’s research revealed that 34% of UK employees named funding retirement as their top money worry, coming out on top for the second year running following last year’s Financial Wellbeing Index report.

The top financial worries in the UK, based on surveys among 2,000 UK employees working for companies with 200 or more employees, are funding retirement (34%), being able to cope financially with a job loss (24%), paying off debts (23%), the state of the economy in general (22%), and how to make money last until payday (16%).

One in five employees (21%) also admitted to worrying about their financial health daily, with only 19% not worrying at all.

Close Brothers head of financial education, Jeanette Makings, commented: ”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. 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.”

The study revealed that more than half (54%) of workers in large businesses felt financially prepared for coronavirus, significantly higher than the 44% of average UK adults.

Close Brothers indicated that 50% of employees also plan to enhance their “financial preparedness”, with around a quarter already having made changes (24%), and a similar proportion looking to make changes in the near future (26%).

Of the people planning to make changes to their financial planning, 13% of employees revealed they plan to save more into their personal pension in light of the pandemic, while 11% suggested they will increase their contribution to their workplace pension.

However, 8% of respondents to the study revealed they will save less into their personal pension in order to access cash now, while 7% indicated they plan to opt out of auto-enrolment.

Makings added: “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.

“Employers have to provide a workplace pension, so the addition of education and continued pension engagement to help employees understand and make the most of this valuable benefit will reduce employee money worries, increase financial security and enhance their employee value proposition. This is just as vital for employees joining their first workplace as it is to those at the point of retirement.”

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