Around 6.3 million employees (22 per cent) in the UK are not confident planning for a financially comfortable retirement, research from Aviva’s Working Lives Report 2023 has revealed.

Instead, nearly two fifths (39 per cent) of employees expect their pension to only provide enough money to “just get by” in retirement, whilst only 20 per cent expect their pension to be enough to retire comfortably.

One in ten staff, however, equating to around 2.85 million employees, have no idea whether they have enough for a comfortable retirement.

The research also showed that those closest to retirement are less confident about their post-work finances, as more than a quarter (26 per cent) of over 45-year-old employees said they were not confident about retirement planning, compared to 20 per cent 16–44-year-olds.

Employees closest to retirement age were also more likely than younger employees to have no idea whether they will have a financially comfortable retirement, with 14 per cent of over 45-year-olds saying they don’t know if they will be able to retire comfortably, compared to 10 per cent of 16–44-year-olds.

Younger employees (aged 16-24) were also the most positive of all age groups about their retirement finances, as 29 per cent stating that their pension will be enough to retire comfortably, falling to 13 per cent amongst over 55-year-olds.

Rising costs have also compounded anxieties, as the research found that 72 per cent of employees have become more anxious about their finances amid the cost-of-living crisis, with women more likely (78 per cent) to feel this anxiety than men (65 per cent).

Employers could help alleviate these concerns, however, as the survey found that 79 per cent of employees would like more support from their employer about planning for a financially comfortable retirement.

Of those, more than two in five (41 per cent) would like more information on how to build up a pension pot, and 45 per cent would like more information on how to make a pension last throughout retirement.

Despite this demand, 20 per cent of employers surveyed said they only provide the minimum retirement planning information required.

Aviva director of workplace savings & retirement, Emma Douglas, argued that there is also more that the pensions industry and government should be doing, particularly in terms of ensuring savers are receiving appropriate financial advice.

She stated: “Pension freedom legislation has given people more flexibility and choice when it comes to choosing how to use savings at retirement, but it has also created a wealth of options. It is desperately concerning that many pension savers are overwhelmed by the choices they face and are sleepwalking into retirement.

“This is a particularly financially challenging time which makes it more important than ever that people understand their pension savings and the retirement options available to them.

“The pensions industry and government must work together to support today’s retirees in making the right choices for what we hope are long and financially comfortable retirements.

“We are calling on government to support pension savers by ensuring they get access to some form of financial advice at retirement which may be full or simplified advice depending on their circumstances.

"We are also asking for the removal of regulatory barriers to allow providers and other regulated entities to deliver more effective support, such as personalised guidance. We also feel more can be done to support employers in promoting pension advice and guidance through workplaces.”

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