Navigating retirement in turbulent times: how can employers lead the way?

As Britons battle economic volatility and the damaging impact of high inflation, the retirement planning landscape has become increasingly complex. While individual budgeting and diligent planning have been touted as solutions, one resource is often overlooked: our employers. Indeed, it is time to redefine the role that organisations can play in helping people achieve their retirement goals.

With people living longer than ever before, the need for robust retirement preparation has never been more pressing. Despite this, nearly one-third of Britons are not saving for retirement at all, underscoring the urgency for additional support.

Naturally, an ageing population means those over the age of 50 constitute an increasingly large portion of the workforce – a record 3.6 million older people are working part time in the UK, according to the Office for National Statistics. As such, it is more important than ever that businesses proactively take steps that encourage retirement planning and financial literacy among their employees, helping them to navigate the uncertain economic terrain with confidence.

Auto-enrolment is not enough

Many employers mistakenly assume that auto-enrolment in a workplace pension is sufficient support for their staff. While the auto-enrolment scheme is an incredibly positive step in supporting employees into retirement, it unfortunately also breeds complacency when it comes to active engagement in pension planning. My Pension Expert’s own research shows that 27% of UK adults with a workplace pension either haven’t checked it in the past year (11%) or have never checked it at all (16%).

Clearly, Britons need more support in understanding the importance of robust planning and engagement. So, providing access to financial education is one pillar through which employers can financially empower their workers. Through workshops, seminars and online resources, businesses can equip their employees with the knowledge and tools needed to make informed decisions about retirement planning. By demystifying complex financial concepts and offering practical strategies for saving and investing, employers can empower people to take control of their financial futures.

Financial advice

The second pillar is that businesses can leverage their resources to facilitate access to independent financial advice for their employees. Whether through subsidised consultations or partnerships with reputable financial advisories, an independent financial adviser will develop a retirement plan to suit an individual’s needs, factoring in their future goals, and, of course, pension savings and assets. They have the knowledge and expertise to analyse that person’s unique set of circumstances and make tailored recommendations to help them secure the best retirement outcome possible.

Crucially, the role of employers extends beyond mere provision of resources to active engagement in fostering a culture of financial empowerment. By including retirement planning discussions into employee benefits programmes and one-on-ones with managers and HR teams, businesses can underscore the importance of long-term financial planning as a cornerstone of overall well-being.

Additionally, incentivising retirement savings through competitive employer-matched contributions or salary sacrifice schemes can further encourage active participation in retirement planning initiatives.

A culture of proactive retirement planning

For the sake of their employees’ financial wellbeing, businesses cannot afford to be complacent, and must re-evaluate what action they are taking to support employee retirement goals. By prioritising financial education, providing access to professional advice, and fostering a culture of proactive retirement planning, employers can empower their workforce to navigate the complexities of the modern economy with confidence and resilience. In doing so, they not only safeguard the financial futures of their employees but also cultivate a workplace environment characterised by trust and security.

*Lily Megson is the Policy Director of My Pension Expert, the UK’s leading advised retirement income specialist (as rated on Trustpilot). Founded in 2010, FCA-regulated My Pension Expert specialises in providing independent advice to UK consumers about their pension plans – it arranges millions of pounds worth of retirement income options each week. The company is entered on the FCA Register № 579999.

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