One in five workers between the ages of 40 and 60 are so worried about retirement finances it is negatively affecting their work.
A survey by Hymans Robertson Personal Wealth found that 35% of “midlifers” are suffering poor mental health due to concerns about their retirement finances.
More than a quarter are losing sleep over whether they will have enough money in the future, it said, while 22% are avoiding social situations and interactions.
The company said employers needed to intervene earlier, offering mid-life financial health checks and giving employees time to “course-correct” their finances.
“This research shows that worrying about future finances is having a negative impact on the mental health, as well as physical and social wellbeing of many workers at the ‘midlife’ stage,” said Julie Hammerton, managing partner.
Retirement finances
“Employers often prioritise mental and physical wellbeing when it comes to their wellbeing strategies. Worrying about finances can often be the root cause of stress.“
More than four in 10 of those surveyed by Hymans Robertson said they were not confident they would achieve their retirement plans, and 15% said they had their head in the sand rather than taking action.
Eighteen per cent said lack of planning for their future had caused friction with their partner.
One of the challenges faced by this age group was juggling financial responsibilities for both children and elderly parents, marking them out as the “sandwich generation” in terms of retirement savings.
“This is also the generation that’s been squeezed on retirement savings, as most were born too late to benefit from generous Defined Benefit (DB) pensions and born too early to fully benefit from auto-enrolment,” added Hammerton.
“As a society, and as employers, if we wait until someone has the lightbulb moment that they don’t have enough to live off in retirement, by then it’s often too late.
“We need to intervene earlier, to give people time to course correct. Ideally, this should be earlier than the midlife point.”
She said companies could look at financial MOTs similar to the digital midlife MOT introduced by the government last year.
Employers could offer interactive webinars, one-to-one guidance or financial coaching, she explained. Access to financial experts could help people not only prepare for the future but also reduce their current stresses, helping them to become more productive.
“People need help, and that help needs to come well before they hope to retire, before it’s too late. The next tranche of retirees is going to need more help than those who’ve gone before,” she said.
Pensions auto-enrolment has helped to involve thousands of workers in defined contribution (DC) schemes, but for many in the 40-60 age group, this intervention may have come too late.
Hammerton added: “Others would have thought ‘my pension has been taken care of’, but unfortunately for most in this age group, they haven’t been saving enough or for long enough.
“Compounding matters further, very few people have other savings to fall back on. We’re just not a nation of savers.”
Hymans Robertson’s research backs up another survey released last month by Wealth at Work. This found that 39% of employees across all generations were worried they would not be able to retire due to rising costs.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Reward, compensation and benefits opportunities
Browse all comp and benefits jobs
