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Pensions & Retirement

38% of employees with a DC pension fear they may never retire due to rising costs, data reveals

WEALTH at work found 83% of employees are worried rising living costs will leave them less comfortable in retirement, up from 81% last year. 

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38% of employees with a DC pension fear they may never retire due to rising costs, data reveals
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More than a third (38%) of UK employees with a defined contribution (DC) pension said they fear they may never be able to afford to retire due to higher living costs, according to research by WEALTH at work. 

83% of employees are worried rising living costs will leave them less comfortable in retirement, up from 81% last year. 

Over a third (36%) said they would like more information about how much they need to retire comfortably.

Most employees expect to work longer, with 82% saying they are concerned they will need to delay retirement to make up for a shortfall in pension savings. 

One in 10 said they do not know how much is being contributed to their pension.

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Financial pressure was the main reason employees said they could not save more, with 33% saying they cannot afford to increase contributions at the moment. 

However, 30% said they plan to increase pension contributions in the future and 25% would like support on how to do this.

Jonathan Watts-Lay, director at WEALTH at work, said: “Many people are understandably worried about whether they’ll ever be able to afford to retire. 

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“When meeting day-to-day living costs become difficult, it’s often long-term savings that take a back seat. 

“But even small changes early on can make a huge difference over time, particularly when combined with employer contributions and investment growth.”

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Watts-Lay added: “One of the problems is that pensions can feel complex and distant, making it easy for people to disengage. 

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“That’s why ongoing support throughout someone’s working life is so important. 

“The earlier individuals engage with their finances, the more options they’re likely to have later on.”

He said: “Workplace financial education plays a critical role, giving people the knowledge and confidence to make informed decisions early and consistently.

“This can include practical guidance on how to save when budgets are tight, such as managing day-to-day finances, budgeting effectively and making the most of workplace benefits. 

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“It can also mean helping people understand how much to contribute, the benefits of increasing contributions over time, making the most of employer matching, and reviewing investments regularly.” 

He added: “For employers looking to support their workforce, specialist financial wellbeing providers are available to help ensure support is reliable and effective.”

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