Article by Phil
How do people feel about work and Financial Planning?
Accountancy firm PWC have conducted a survey into people’s attitudes to work and their expectations. (reported in IFA Magazine 20/6/23) It makes for interesting reading. In the UK they found that:
- 25% of the workforce expect to change jobs in the next 12 months.
- 12% of workers have more than one job.
- Over one third said that they will ask their employers for a pay rise.
- 20% say that they are over worked
- And 21% are unhappy at work.
- Nearly half of workers say that they have no money left at the end of each month after paying their bills.
It doesn’t paint a happy picture.
Employees are also concerned about work and financial planning for their retirement. According to the latest survey from Aviva (FT Adviser 26/6/23), they found that:
- 80% of employees said they would like more support from their employers to understand their pensions
- Of the 80%, 40% said that they wanted to know how they could build up their pensions
- And 45% wanted to know how much they needed to retire (the age-old question)
- Only 20% of employees said they thought their employer provided enough support and information.
- Funnily 20% of employers said they did more than the minimum for their employees – a mismatch here then.
- As we’ve seen before, 30% of employees didn’t know how many pensions they had or how to track them down.
In response to these concerns the Department of Work and Pensions (DWP) has just launched a new website Midlife MOT, which offers guidance to employees on a range of subjects, including how their pensions work and financial planning.
Hargreaves Lansdown also found that:
- 20% of employees wished they had paid more into their pensions, and
- 12% wished they had known more about their pension options, but surprisingly
- 44% said they had no regrets about their pension planning. (Perhaps they work for the civil service!)
But the current cost of lockdown climate hasn’t hit everyone. According to iSIPP 70% of over 55’s have continued to save into their pensions. This is not what every survey has found as we have reported.
It’s the younger savers who are cutting back. 40% of under 35’s have cut back on their pension contributions. The figure is 33% for 35- to 45-year-olds.
But not everyone is getting advice. Just Group found that 41% of pension drawdown products were “sold” to people not taking advice in 2022, compared with only 34% in 2018. Put the other way round. 66% of people retiring in 2018 took advice, but only 59% in 2022.
The situation is not helped by the Department of Work and Pensions (DWP). They estimate that over 200,000 people’s state pensions have been underpaid, with over £2 billion due. The underpayments result from poor record keeping, especially for non-working women whose National Insurance records haven’t been properly maintained. Most of those owed money are now in their 60’s and 70’s. the average debt is thought to be over £5,000 per person. The DWP says that it will be writing to people who may have been underpaid later in the year to start the process of redress.
