Employers, backed by the government, should provide holistic later life planning throughout an employee’s working life, Lydia Fearn, head of DC pension and investing consulting at Barclays Corporate and Employer Solutions has said.
Given that most people’s income and standard of living in retirement will be affected by the choices they make throughout their working lives, she said that guidance therefore needed to take a “long-term approach, and engage with employees at the earliest point in their career to ensure they can meet their retirement ambitions”.
According to research done by the consultancy arm, three-quarters of people need help just to understand their likely income in retirement, and are looking for financial support.
Most are not confident in the plans they have already made, with 66 per cent stating that the government should share in the responsibility of financial planning, and 47 per cent thinking their employer should play an active role.
She said: “Our findings from the research demonstrate the need for widespread encouragement of financial planning from government, and particularly employers, in providing behaviourally informed guidance with a generational outlook if people are to engage earlier with their retirement plans.”
Ms Fearn added that, based on what people said they would need for an adequate lifestyle, a UK living pension would require an income of about £17,500 a year on average.
She said: “We believe that implementing a financial well-being programme within a company can go a long way to help inform and navigate employees through quite complex financial decisions, so we encourage employers to put financial education at the core of workplace support.”
Matthew Walne, managing director of Leicestershire-based Santorini Financial Planning, said: “Financial planners have a big role in this, to find out what an individual or couple really want to achieve and help them prioritise. It is not all about the money.
“A lot of people are not always mentally, physically and emotionally prepared for retirement. Although the employer and government can help on a wider basis, it’s really down to the individual. It’s a personal issue.”