Navigating Retirement: How Organisations Can Support Their Employees

With the ageing population in England and increasing challenges in retirement savings, it is crucial for organisations to proactively support employees in planning for a financially secure future

CREDIT: This is an edited version of an article that originally appeared on The HR Director

In England, the population of individuals aged 65 to 79 is projected to grow by nearly a third (30%), exceeding 10 million over the next 40 years. According to the Pensions and Lifetime Savings Association, a single individual will need approximately £14,000 annually to achieve a minimum standard of living, £31,000 for a moderate lifestyle, and £43,000 for a comfortable retirement. Yet about two in five working-age adults are not saving enough to reach even the minimum threshold for an adequate retirement income.

Given these pressing issues, what additional steps can managers take to ensure that employees approaching retirement are well-informed and equipped to make sound decisions for a secure financial future?

Improving Pension Knowledge

A significant shortfall in the UK’s pension planning landscape is the limited availability of affordable advice for individuals nearing retirement, especially those with smaller pension pots. Additionally, many individuals lack a clear understanding of key concepts like drawdown and alternative options, such as annuities, which can offer a guaranteed income during retirement

Organisations should take a proactive approach to support retirement planning much earlier in their employees’ careers. Engaging employees in pension saving can be challenging, especially during a cost-of-living crisis. However, it’s essential to communicate that this is precisely the time to save as much as possible, as early contributions have the greatest potential to grow over time

Managing Money

Many employees face challenges when it comes to managing their finances, often lacking the necessary skills and knowledge to navigate their financial landscape effectively. Providing resources on reducing debt, budgeting and saving can significantly enhance employees’ financial literacy.

However, it’s essential to recognise that finances are deeply personal, and what works for one individual may not work for another. Therefore, rather than offering direct financial assistance, organisations might find it more effective to signpost employees to trusted financial planning workshops or external resources. This approach allows employees to seek the help they need at their own pace and comfort level while ensuring they have access to professional guidance.

Visualising Retirement

Establishing realistic retirement goals can be a manageable and empowering process for employees thinking about life after work. Recognising that life is full of uncertainties, it’s crucial for employees to have a flexible plan that can adapt to various changes over time.

Encourage them to regularly review and adjust their retirement strategy, ensuring that it aligns with their evolving circumstances and aspirations. Whether it involves traveling the world, pursuing hobbies they’ve always wanted to explore, or spending quality time with family and friends, having a clear vision can be a powerful driving force.

As the workforce continues to age, equipping employees with the knowledge and tools they need to secure their financial futures will not only enhance their well-being but also contribute to a more engaged and productive workplace.