Nearly two-fifths of workers in full-time employment think they will never be able to afford retirement, a survey has found.
Financial wellbeing specialist Wealth at Work revealed that 39% of employees feel that the rising cost of living means they won’t be able to retire, up from 33% a year ago.
Those aged between 35 and 44 are most likely to believe this, with almost half (46%) expressing this fear.
Almost a third (32%) of all workers said they would likely delay retirement, up from a fifth this time last year, the company found.
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Eight in ten (81%) are also concerned that rising costs mean they will be less comfortable in retirement due to a shortfall in savings, with the same amount (81%) saying they are concerned they will have to work longer to make up for the shortfall.
Forty-one per cent said they did not feel supported at work in terms of understanding their finances, according to Wealth at Work. More than half (54%) said they would prefer to get advice on retirement savings from friends or family, and only 14% said they would speak to their employer.
Jonathan Watts-Lay, director at Wealth at Work, said workers between 35 and 44 were a generation to have benefited from “a full working life of automatic [pensions] enrolment”, and would be less likely to have final salary pensions.
“In fact, pre auto-enrolment, many in this age group may not have saved into pensions at all, therefore missing a number of years of contributions and growth on those contributions,” he said.
“It may not seem important now but preparing your finances for later life is one of the most important things someone can do. Many don’t realise the significant difference a small increase to their pension savings can make.”
He added that making small increases to pension contributions, particularly if an employer can match them, could boost future savings by as much as 25%.
“This may not feel affordable but making small changes such as setting a household budget, shopping around and not auto-renewing on things like car insurance, as well as utilising workplace benefits i.e. discount schemes, really can make a huge difference,” he said.
Watts-Lay advised employees approaching retirement to work out a financial plan, including identifying any pension pots they already have.
He added: “There are 2.8 million lost pension pots sitting unclaimed because they’ve been lost or forgotten about, so it’s important to track them all down before working out what income you’ll have.
“If people have several pensions and struggle to keep track of them all, it might make sense to consolidate them.”
Finally, he urged employers to improve the level of financial advice and support on offer.
“Financial guidance is particularly beneficial for individuals at retirement when faced with complex decisions around how to best access their pensions and retirement savings.
“It can act as a gateway to regulated advice for those who would benefit from it, as it can help them recognise all the complex things they need to understand about their finances. In doing so, they may then realise that they need specialist advice.
“Giving people the opportunity to understand ways to save money, learn about budgeting and how to boost savings and prepare for retirement can make a huge difference to their finances.”
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