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Multi-generational workforces key to successful retirement saving

29 June 2020

Age-friendly employers are integral to helping employees financially prepare for retirement, a new report from Aegon has shown. 

According to the findings from The New Social Contract: Age-Friendly Employers, workplaces which offered an inclusive, diverse and multi-generational workforce were better able to support their employees to extend their working lives and save for retirement.

UK employees expect they will need on average 67% of their current income in retirement but only 24% believe they are on course to meet that target.

Aegon said the need for employers to help workers financially prepare for the future has become even more crucial amid the Covid19 pandemic.

Steven Cameron, pensions director, Aegon, says: “Faced with the impact of the Covid-19 pandemic and a stalling of retirement readiness globally, the need for a new social contract across governments, employers and individuals is now more apparent than ever.

“As the employer-employee relationship evolves, the role of employers in helping workers prepare for retirement extends beyond offering retirement plans and financial benefits – employers also influence workers’ skills development, education and overall well-being.”

According to Aegon, just over a third (34%) of UK employees say their employer is doing nothing to facilitate a multi-generational workforce, while only 13% of workers have a written retirement strategy and just three in 10 (30%) have a back up plan in the event they are unable to continue working before they reach their planned retirement age.

Aegon says employers should consider providing retirement, health and welfare benefits and design them with portability in mind so that workers can maintain them as their employment situation changes as well as offer retirement planning services and financial advice.

The retirement specialist believes employees would also benefit from financial education, training or financial wellness programmes in the workplace and says businesses should facilitate lifelong learning to help workers keep their job skills up to date and relevant.

Mike Mansfield, program director, Aegon Centre for Longevity and Retirement, comments: “Today, individuals are expected to save and invest for an increasing proportion of their retirement income. However, many people find themselves ill-equipped to do so and will likely face further financial pressures in the wake of COVID-19.

“Findings from Aegon’s 9thAnnual Retirement Readiness Survey confirm that individuals need more support to harness their true savings potential to adequately prepare for their financial future.”

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