Young workers in UK pessimistic of retirement reality

News


13 Aug, 2018

Young workers in UK pessimistic of retirement reality

Young employees in Britain are negative about their retirement prospects but are eager to start making preparations to make the most of the situation, according to a report released on Monday.

Investment advisers State Street said workers in the UK are amongst the most pessimistic in the world in regard to their financial situation when they reach retirement.

Results of a survey undertaken by State Street reveals that less that one in 10 young workers feel financially ready for retirement.

A similar number stated they were of the opinion they’d be able to retire as and when they desired.

Nigel Aston of State Street said in the report: "People are interested in securing their financial future and are willing to make changes to their spending habits to make this happen.

"They are also realistic about their income expectations in retirement. We must use this positivity to make it as easy as possible for individuals to understand their options."

Almost 10,000 people took part in the survey across the world, the results of which highlighted that UK employees expected their retirement income to be half of their earnings whilst still working.

However, according to a BBC report, only 6% of workers believed they would be in a position to afford their chosen lifestyle when retired.

This was a much more negative result than their U.S. counterparts, with 23% confirming they thought they’d be in a financial position to live their desired lifestyle in retirement, along with Germany (18%), Australia (15%), and Italy (10%).

The State Street report followed another review that suggested women faced a "glaring" gender pension gap due to career breaks to bring up children and lower pay.

Fidelity International said that young women in their late 20s and early 30s faced an 11% smaller pension pot than men by the time they reach retirement.

Fidelity International's investment director, Maike Currie said of this report: "A lack of time, confidence, access to the right information, industry jargon and not knowing where to start are just some of the obstacles that stop many women from thinking that investment is for them.

"Until these hindrances are removed, or at the very least addressed, we cannot unlock women's financial power."