Bridging the retirement gap: Financial and mental wellbeing in focus

The Reward & Employee Benefits Association (REBA) has issued a Press Release referencing Standard Life’s Retirement Voice 2024 offering an in-depth look at the state of retirement savings in the UK and the challenges faced by employees and employers. Highlighted below are the key findings and recommendations for addressing the concerns about financial and mental wellbeing. 

Financial and mental wellbeing 

The cost-of-living crisis has left many UK workers uncertain about their financial future. Despite a cautious return of optimism, the impact of high inflation and interest rates continues to loom. Standard Life’s research shows: 

• 51% of individuals worry about insufficient retirement savings. 
• Millennials are the most concerned, with 66% expressing anxiety, followed by 60% of Gen Zers and 58% of Gen Xers. 
• Fewer people report feeling financially comfortable compared to previous years. 

These financial anxieties also impact mental health, with women and those with lower household incomes disproportionately affected. 

Retirement savings awareness 

One notable gap is the lack of awareness about retirement requirements: 

• According to the PLSA (Pensions and Lifetime Savings Association), 77% of individuals are unclear about how much they will need for retirement.
• The Retirement Living Standards provide benchmarks for a ‘minimum,’ ‘moderate,’ and ‘comfortable’ retirement, yet many remain unaware of these standards. 

The role of employers

Employers can play a pivotal role in improving retirement readiness: 

1. Education and Tools: Standard Life recommends signposting employees to resources like the Retirement Living Standards and tools such as their Retirement Income Tool, which integrates these benchmarks. 
2. State Pension Awareness: Encouraging employees to check their state pension forecast and National Insurance record is vital, as the state pension often falls short of even the ‘minimum’ retirement living standard. 
3. Budgeting Support: Employers can help employees with financial resilience by promoting budgeting tools like MoneyHelper or Standard Life’s Budget Planner. 

At The Private Office we have our own retirement calculator which can help you to understand whether you're saving enough for retirement.

Retirement expectations and realities 

The study also delves into retirement behaviours and expectations: 

• Nearly half of respondents anticipate working beyond the state pension age due to financial necessity. 
• Retirement planning divides the population into 'Planners' and 'Non-Planners.' Planners generally enjoy better financial wellbeing and confidence in their future. 
• Encouragingly, 89% of retirees are content with their retirement decisions. 

The importance of advice and planning 

Professional financial advice significantly enhances confidence and outcomes for retirement planning: 

• Those who receive advice feel more secure and consider it good value for money. 
• Millennial and Gen Z respondents are particularly open to AI-powered financial guidance. 

Employers are uniquely positioned to bridge the knowledge and confidence gaps among employees. By fostering awareness, providing tools, and supporting everyday financial resilience, they can alleviate anxieties and help their workforce achieve better outcomes in retirement. 

Cashflow modelling can be incredibly useful in this situation, as it provides a clear and personalised view of an individual’s financial future. By mapping out projected income, expenses, and savings over time, it helps people understand whether they’re on track for their goals at any stage of life, and identify any adjustments needed to improve their financial outlook.

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions. 

 The Financial Conduct Authority (FCA) does not regulate tax advice or cashflow modelling.

Pensions are a long term investment and any income derived from them is not guaranteed, the value of these investments can go down as well as up and you may not get back what you originally invested. 

The information in this article is correct as at 23/01/25.