Nearly half of under-50s admit they are not doing enough to prepare financially for their retirement.
The Scottish Widows Workplace Pensions Report 2010 finds while nearly half of the respondents over 50 are in final salary schemes, and largely relying on such provision for their retirement income, fewer than one-third of the under-30s are in such schemes.
It also finds the younger generation are less engaged with their pensions despite needing to do more to provide for a comfortable retirement.
Scottish Widows head of marketing communications for corporate pensions Ann Flynn explains: “Younger age groups are not engaging at all in the DC propositions that are being offered to them.
“Something is going wrong. We have got this older population who are probably going to live to 100 and that is fine but we have a younger population who could live even longer but are not making the right kind of provision.”
The report also demonstrates the need for employers to offer advice and guidance to help employees better understand their pension scheme and its benefits, as well as their wider saving needs.
Two-fifths of respondents feel employers should offer full financial advice if they provide access to a pension, with a further 55% stating they think that their employers should at least offer some kind of general information.
Flynn urges employers to work more with employees to help them to understand the need for savings and to consider corporate platforms, such as Scottish Widow’s mymoneyworks, to help engage staff and include a range of different savings vehicles, such as corporate ISAs, to help employees both achieve short-term savings goals and get into a habit of saving.
Flynn says: “As the face of UK workplace pension provision continues to change, it is important for employers to engage with their employees to help their understanding of the benefits available to them as the individual has to take responsibility and make the correct decisions about their short, medium and long term financial planning needs."
She adds: "The aim is to help employers engage with their employees about the benefits available to them and to make it easier for employees to access financial education and guidance to help them take control of their financial planning."
Annuity market worth £4bn in 2017
For ‘distress’ caused
Oversees £30bn of advised and D2C assets
Less than a third of top paid employees are women
£1bn business since inception