59% of British Millennial Employees Struggle with Retirement Savings
Six out of ten (59%) British millennial employees have admitted they struggled with saving for retirement due to their life stages. Among these life stages are common challenges employees face such as parental leaves and childcare, homeowner responsibilities, or a career change or break.
This Pacific Prime UK article will discuss the retirement saving struggle that up to 59% of millennial employees in the UK face as well as the importance of saving for retirement and proper financial safety nets such as health insurance.
Overview: The Retirement Saving Struggle 59% of British Millennial Employees Face
A staggering 59% of British millennial employees admitted struggling with saving for retirement due to life stages. In comparison, only 48% of Gen Z employees and 39% of Gen X employees struggled with retirement savings.
According to a research by long-term savings and retirement business, Phoenix Group, out of 4,000 British adults, 25% of the millennial respondents in their late 20s to early 40s cited income change as the main reason for their retirement saving struggles while 24% cited childcare responsibilities.
Millennials were also found to be twice as likely as any other age band to struggle with retirement saving due to childcare.
Some common reasons millennial employees struggle with saving for retirement, according to the research, include parental leaves and childcare, homeowner responsibilities, or career changes and breaks. Additionally, women are particularly impacted due to their likelihood of needing parental leave to fulfill childcare responsibilities on top of work duties.
Comments from Phoenix
According to the head of research analysis and policy at Phoenix Insights, Patrick Thomson, the research found some millennials have “decreased or stopped” pension contributions yet the numbers doing this “remain low”, stressing the benefits of people opting for pension saving.
Thomson also stated there’s a risk that people who don’t readjust their savings following a short-term financial challenge won’t be able to retire with as much money as they’d hoped for.
He went on to say that as many as “17 million people” aren’t saving enough for their expected retirement, emphasizing the importance of taking steps to address saving gaps if possible. Additionally, employers also play a significant role in guiding employees through retirement savings, including employer contributions while the employee is on parental leave.
Why Retirement Saving Matters
Saving for retirement ensures financial security and peace of mind in your later years as you completely forego your income and former work hours. By setting aside some money while you’re still active, you will be able to craft a financial plan to cover various expenses such as housing or healthcare by that time as housing or healthcare costs can skyrocket as you age.
Because healthcare costs can skyrocket as you age, it’s strongly recommended that you secure health insurance as early as you can in your younger years. That way, your premiums are lower, and you will get covered in the event of chronic illnesses since they aren’t considered pre-existing conditions.
How Employers Can Help Employees with Retirement Saving
Aside from encouraging employees to set up emergency savings or continuing to financially contribute to employees on parental leave as mentioned previously, employers can also help employees with retirement savings by offering additional services such as financial counseling and budgeting advice as part of the employee assistance program (EAP).
The financial counseling and budgeting advice as part of the employers’ EAP can go beyond retirement savings by offering guidance on the employees’ current areas of financial concern such as their children’s tuition fees, childcare expenses, healthcare expenses, or housing expenses.
By offering financial guidance services as part of the employee benefits scheme, employers can not only lend their employees a helping hand, but the employees will also feel valued, which will increase their job satisfaction and culminate in increased job productivity as they feel understood by their supervisors.
Conclusion
As you can see, challenges such as childcare responsibilities and parental leave are some of the biggest obstacles in retirement savings for employees. So, while you’re actively working, setting aside a portion of your income for retirement savings is strongly recommended.
Having a solid retirement saving plan will ensure your financial security and peace of mind by the time you choose to settle down. This is because key expenses such as housing or healthcare can steadily increase as you age. Employers, through financial guidance as part of the employee benefits scheme, can also lend a helping hand in employees’ efficient retirement savings
Having a good group health insurance plan and employee benefits solution, however, can help cater to each employees’ individual needs to ensure their voices are heard. This can be as simple as counseling services or confidential discussion sessions between the employee and their supervisor.
While coming up with adequate employee benefits solutions may be challenging, it doesn’t always have to be a headache and that’s where we come in.
As an experienced international health insurance broker and employee benefits specialist, Pacific Prime UK has helped expats and local citizens seek out suitable health insurance plans that match their budget and healthcare needs as well as adequate employee benefits solutions.
Whether you’re an expat or a local British citizen yourself, or you’re an organization seeking employee benefits solutions to cater to your employees’ needs, we’re more than happy to help you with completely impartial advice at no additional cost.
If you have any further questions, please get in touch with us or get a free quote for plan comparisons.
He graduated with a Bachelor’s Degree in Communication Arts, Media & Communication major (concentration: Creative Content) from Mahidol University International College (MUIC). During the compulsory major elective period in the summer of 2021 and voluntarily during the summer of 2022, he also interned as a video and photo editor at Mbrella Films.
He has experience working as an English Content Writer at a real estate buying/renting/selling platform in Thonglor. There, he crafted company blog posts on a multitude of topics. Topics include market trends, legal issues and disputes in property businesses, financial guides, expat guides, home insurance, home decoration and maintenance, and weekly real estate news quick-recaps. Occasionally, as part of the blog-writing process, he would also translate existing Thai blogs to English.
In his free time, Guy enjoys doing scriptwriting and storytelling for comic strips, watching movies, and listening to music (particularly film scores).
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