UK SME employers say pensions industry must adapt to younger workers, Digi Mart USA News (United Kingdom): More than a third (36 per cent) of small and medium-sized enterprise (SME) employers said the pensions industry has not adapted quickly enough to changing workforce expectations, according to research from People’s Pension.
The survey found that almost half (45 per cent) reported that immediate financial pressures prevent workers under 25 from prioritising long-term saving. Twenty-eight per cent of respondents believed adapting workplace pensions to better suit fragmented or less traditional careers will define the system’s next major phase.
The research also highlighted wider concerns about younger workers’ attitudes towards retirement saving. More than a third (37 per cent) of SME employers said younger employees increasingly view a comfortable retirement as unrealistic, while 36 per cent believed they are less engaged with pensions than previous generations.
Employers attributed these challenges in part to changes in working patterns. Thirty-two per cent said delayed career progression and lower earnings are reducing opportunities to build retirement savings early, while 27 per cent said more fragmented and less secure careers make long-term pension saving harder.
Just 4 per cent felt younger workers face no significantly different retirement challenges.
The survey also identified several areas where employers believe retirement outcomes could improve. A third (33 per cent) said better financial education from a younger age would have the greatest impact, while 29 per cent pointed to stronger government incentives to save and 26 per cent said simpler retirement options could help future workplace pension savers.
People’s Pension argued that the findings highlight the importance of helping people understand and engage with their pensions from an early age, even when increasing contributions may not be affordable. Stuart Reid, distribution director at People’s Partnership, said younger people are entering the workforce in a very different financial environment than previous generations.
“Many are balancing immediate pressures with the need to save for the long-term, while the traditional idea of a steady career and a predictable path towards retirement is becoming less relevant for some,” Reid said. “We can’t expect younger workers to simply fit into a workplace pension system built around very different career paths.
The system must evolve alongside them, making it easier for people to understand the value of saving and stay connected to their financial world as their jobs, earnings and circumstances change.”
Reid added that employers and providers have “an important role to play” in making conversations about money and pensions easier and giving people the confidence to make informed financial decisions.
