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Gloucestershire Business News

Nearly three million don't know whether they can retire comfortably

More than six million UK employees are not confident of planning for a financially comfortable retirement, according to Aviva.

One of the UK's largest workplace pension providers, Aviva found that more than one in five (22%) employees surveyed were not confident of their financial future. This could be around 6.3 million employees in the UK.

Aviva's Working Lives Report 2023: Fit for Future found those closest to retirement are less confident than younger employees about their post-work finances.

More than a quarter (26%) of over 45-year-old employees said they were not confident about retirement planning compared to one in five (20%) 16 to 44-year-olds.

Most employees say their pension will only provide enough money to "just get by" in retirement (39%). Only one in five (20%) said their pension would be enough to retire comfortably, and one in ten - which potentially equates to around 2.85 million employees - have no idea (10%).

Younger employees (aged 16-24) are the most positive of all age groups (29%) about their retirement finances. This steadily decreases the older people get, with just over one in ten (13%) over 55-year-olds saying their pension will be enough to retire comfortably.

Almost three-quarters of employees (72%) said the cost-of-living crisis has made them feel more anxious about their finances, with women more likely (78%) to feel this anxiety than men (65%).

Emma Douglas, Aviva's director of workplace savings & retirement, said: "Pension freedom legislation has given people more flexibility and choice when it comes to choosing how to use savings at retirement, but it has also created a wealth of options.

"It is desperately concerning that many pension savers are overwhelmed by the choices they face and are sleepwalking into retirement.

"This is a particularly financially challenging time which makes it more important than ever that people understand their pension savings and the retirement options available to them.

"Whether you want to consolidate your pensions into one pot; work out whether drawdown or an annuity or a blended option is right for you; or how to make sure your pension savings last throughout retirement; getting the right advice, guidance and support is essential."

Almost four in five (79%) employees would like more support from their employer about planning for a financially comfortable retirement. Of those, more than two in five (41%) would like more information on how to build up a pension pot, and 45% would like more information on how to make a pension last throughout retirement.

One in five (20%) employers surveyed said they only provide the minimum retirement planning information which is required. (1)

Emma Douglas added: "The pensions industry and government must work together to support today's retirees in making the right choices for what we hope are long and financially comfortable retirements."

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