Naomi Osinnowo asks what needs to be done to get people to engage with retirement planning.
Trying to convince an employee earning less than £40,000 a year that they can add ‘retirement planning' to their long list of outgoings is not an easy feat.
Workers continue to struggle to make provisions for their retirement because, in simple terms, they do not think they can afford to.
Obstacles including debt and giving financial support to family members are constricting incomes already squeezed by the rising cost of living.
Alan Higham, director and founder of Retirement Angels, says: "For someone earning less than 40k per annum, living in rented accommodation then saving for retirement isn't economically rational."
Over half (55%) of respondents to Aviva's 2012 Working Lives report who have access to a pension scheme agree a shortage of cash is the main barrier preventing them from signing up.
However, almost all (96%) of the 2,000-plus private sector employees surveyed for the research said they do have spare cash at the end of each month but they admitted saving for retirement was not high on their list of options for how to spend this money.
Alistair McQueen, workplace savings manager at Aviva, says the results suggest prioritisation is actually a bigger barrier to saving money for retirement than affordability.
Meanwhile, the company's Saving Engagement and Employment Index, an offshoot of the report, found employee engagement in retirement planning on a scale of 0 to100 was only at 29.
This indicates advisers, providers, employers and government need to work with individuals to improve engagement.
McQueen says: "All stakeholders have a responsibility to challenge this low-level engagement and the individuals themselves have also got a responsibility to step up and consider their own long-term financial wellbeing."
Communication and education are crucial to cultivate this ethos of awareness, action and accountability.
The financial services sector has helped to build a solid foundation for retirement planning. But more still needs to be done.
Andy Zanelli, head of retirement planning at AXA Wealth, says: "The industry needs to adapt and find innovative ways to engage with differing audiences in a way that is relevant and resonates with them."
Some steps have already been taken in this arena. Aviva launched a social networking campaign called Magic Money in 2011 to inform younger employees of the value of saving for their future.
Colin Simmons, pensions business development manager at Prudential, says: "Legislation and market conditions over the past couple of years have led to some important innovations in the retirement market. Flexible products are being created to provide investors with some degree of guaranteed income".
But this has not been enough to provide the needed boost to pension take-up rates.
Auto-enrolment, which will be rolled out in stages from October this year, is expected to revolutionise retirement planning by making it compulsory that all UK employers offer their staff access to a workplace pension scheme.
The initiative has the potential to get 30 million people saving long-term.
However, Aviva's research has found that 68% of private sector employees have little or no knowledge of auto-enrolment.
This indicates the industry has more work to do to highlight the importance of retirement planning. This is highlighted in the fact more people speak to their family and friends about workplace pensions than they do financial advisers.
However, Higham says there are steps advisers could take to get people to engage more: "Acting on consumer research to understand the questions people want answered about retirement," he says. You also need to keep honesty and ethics as the basis for our advice process to encourage trust as well as keep the messages simple."
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