Recent economic events have dented investor confidence, according to research from MFS Investment Management, with 61 per cent of UK scheme members stating that inflation had prompted them to change their thinking about retirement in the past 12 months.
The survey found that, in particular, 53 per cent had opted for a more conservative investment approach, while 69 per cent thought they would now need to save more than they previously planned.
In addition to this, 60 per cent expected to need to work longer while 35 per cent no longer see themselves as retiring at all.
In line with this, there was also a growing trends towards a gradual transition into retirement, as 68 per cent of members expected to take this approach, while just under a fifth (19 per cent) expect a hard stop whereby they stop working for pay entirely.
Predictability in retirement was also becoming more important to investors, as almost three-quarters of UK members surveyed said that receiving a predictable stream of income is important to them.
Given this, MFS Institutional Relationship Management Director Kim Crabtree pointed out that while annuities have been out of favour for a long time with interest rates being so low, the changing rate environment means providers are seeing more interest around this type of guaranteed income product.
More broadly, the research also looked at retirement advice, revealing that 40 per cent of UK scheme members are looking to their employer to help them make their retirement planning decisions.
Other resources highlighted include financial advisors and plan providers, which were both cited by a third of respondents, while 30 per cent said that they would turn to financial media for support.
There was a generational divide, however, as baby boomers were the most likely to use a financial advisor, and financial media was a preferred source of retirement advice among boomers in the UK and Canada.
However, global millennials were found to be the most likely to use online investment services, family, friends or employers for advice, while UK millennials in particular were more likely to use plan providers.
This generational divide could also be seen in the findings around environmental, social and governance (ESG) investing, as MFS found that demand for ESG continues to be inversely correlated with age.
In the UK, most of the demand is being driven by millennials (83 per cent) versus 57 per cent for boomers.
Furthermore, almost three quarters of millennials indicated that they would be likely to contribute at a higher rate to the retirement plan if it offers investment options that consider ESG issues, compared to 64 per cent of baby boomers.
Overall, MFS found that UK members remain interested in seeing more ESG investments offered in their retirement plans, with 76 per cent of respondents indicating they would like to see more ESG investments offered in their retirement plan.
Crabtree highlighted the willingness of younger investors to put money behind ESG as evidence of a "widening ESG generation gap", suggesting that this trend is likely to have an impact on investment options going forward and shows plan providers what they need to do to help millennials.
He added: "As more millennials take up positions of responsibility within the pensions industry, bringing new skills, priorities and ways of thinking to the table, they are fast becoming advocates for their generation.
"It will be interesting to see if this shift in the workforce has a trickledown effect and helps remedy the lack of understanding of pension issues so prevalent across the millennial generation."
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