When it comes to trade-offs for a comfortable retirement, workers around the world would prefer to save more of their disposable income (40 per cent) or spend less and downsize (32 per cent) than give up holidays (9 per cent) or be less generous to family and charities (10 per cent), the Mercer’s Healthy, Wealth and Work-Wise report has revealed.
However, 15 per cent of workers aren’t willing to do anything to ensure they can maintain a desired standard of living after retirement, the report, based on an international survey, found.
“Globally, people are not saving enough for their futures,” Mercer warned.
“With increasing longevity and shrinking pensions, this is becoming a critical issue with more and more people set to outlive their savings. In fact, less than one-third (30 per cent) of us are confident we will be able to afford to live as long as we likely will.”
However, 81 per cent of people consider themselves to be responsible for ensuring they have enough income in retirement and 85 per cent are interested in using secure, jargon-free, online finance tools to get them there.
Mercer suggested that this is where employers come in, as they have the ability to implement programs and software to assist workers engage with their finances.
The report found that 60 per cent of workers are stressed about their financial security, but employers are in a “good position” to help savers navigate the path to retirement.
Noting that workers trust their current employer (79 per cent) more than online financial tools (61 per cent) and financial advisers (56 per cent), Mercer said, “As employees place a great deal of trust in employers for financial advice, now is not the time for organisations to reduce employee healthcare or financial security benefits.”
The research also found workers trust the government the least (55 per cent) when it comes to providing “sound advice on planning, saving and investing for retirement”.
Savers trust their partners or spouses the most (88 per cent) followed by their family (85 per cent).
“The greater level of trust that employees place in their employers compared to other sources surprised business leaders, who assumed employees placed an equal amount of trust in financial advisors and their employers,” Mercer said.