“As the third chapter of life, retirement should be a positive experience,” according to Tom Evans, managing director, retirement, at Canada Life. “And for many that is, thankfully, the case.”
However, 40 percent of the current generation of retired people have retirement regrets, according to a survey from Canada Life.
Regrets ranged from wishing they had increased their pension contributions while still working (17 percent), to making lifestyle adjustments to put more money aside for later years (12 percent), and that if they had their time again they would retire later than they did (8 percent).
Evans said this insight from retirees offers lessons for working age people. The findings highlight why it is crucial to have a plan for retirement and seek advice at the earliest opportunity, he said.
Evans’ seven top tips to avoid retirement remorse
- Get in early – Earlier engagement in pensions, and financial planning more broadly, improves retirement outcomes. HR can support this with regular employee reminders and better use of all available communications channels.
- Think outside the annual benefit windows – Don’t just leave retirement messaging to nudging people once a year. Your employees will experience life events at many points during a year and this can be a great ‘in’ to get better engagement on savings.
- Do a default reality check – The UK has successfully auto enrolled more than 10 million workers into pensions, which is a brilliant start. But we need to show employees that accepting the default savings levels, and often investment choices as well, won’t deliver the retirement many hope for.
- Broaden your savings focus – As experts, we shouldn’t just focus on pensions. Other savings include ISAs, exploring the role of property and inheritance. These will all play a part in the retirements of future generations.
- Cut through the noise – Employers don’t have to have all the answers and means themselves. There is a wealth of information and help available online, but cutting through the noise and signposting to genuinely helpful resources is key. For example, the government backed Moneyhelper website has some brilliant information around money management, pensions and retirement planning.
- Be a dashboard champion – Pension digital dashboards are coming shortly. They will increase engagement in financial planning because they will show all the pensions an individual has in one place, including the state pension. We can build on that through some really good online resources pointing employees in the right direction, for example guiide.co.uk.
- Seek out an adviser – For employees who are engaged, but find building a plan daunting, an adviser will help them navigate the tax system and financial regulations. A regulated adviser will tell you if you are on track, and help you keep your plan on track, as you work through the myriad of choices around investing, generating a replacement income, the tax system and estate planning and inheritance. It will also give some peace of mind that the choices they make are right for them and their family.
Evans added: “As employers we need to constantly remind ourselves employees are individuals with very different expectations of retirement, often borne from the experiences of parents and grandparents. We are now working longer, often driven by the rising state pension age. This comes with the financial benefits – the opportunity to continue to grow retirement savings – and equally the health benefits from meaningful engagement in work later in life.”
