WEALTH at work warns growing pension uncertainty is driving demand for workplace retirement guidance 

Almost two in five employees approaching retirement do not have a clear retirement income goal, raising concerns that many are making important financial decisions without fully understanding what their pension will provide.

A study of 2,000 UK workers with defined contribution pensions found that 39 per cent of employees aged 55 and over do not have a clear retirement income goal, while 19 per cent are unsure what their pension will be worth when they retire. 

Despite this uncertainty, relatively few are taking steps to improve their understanding. Just 27 per cent of over-55s said they had looked at what their pension savings might provide in retirement, while 28 per cent said they would like help setting a retirement income goal. 

The findings from the study by WEALTH at work come as retirement expectations continue to shift, with 40 per cent of employees aged 55 and over saying they have already delayed their retirement. 

The research also suggests many employees feel they are navigating these decisions without sufficient support. Almost 38 per cent of workers aged 55 and over said they do not feel supported by their employer when it comes to understanding their pension, compared with 30 per cent of employees across all age groups. 

The findings coincide with changes introduced through the Pension Schemes Act, which places greater emphasis on supporting people as they move from saving into retirement. The legislation is expected to encourage more structured retirement journeys and introduce default retirement income solutions designed to help members make informed decisions. 

Jonathan Watts-Lay, Director of WEALTH at work, said many employees continue to lack confidence at a critical stage of their financial journey. 

“Retirement decisions are complex and highly personal, and experience shows that many people want and need support with this,” Watts-Lay said. 

“While new legislation is placing greater emphasis on how members are supported at retirement, there is a real risk that generic default pathways could lead people into decisions that don’t reflect their individual circumstances or needs. This is particularly important given that our research shows many people approaching retirement still lack clarity around what their pension will provide.” 

He added that many employees are postponing retirement without having a clear understanding of whether they can afford to stop working. 

“Our research also shows that many people are delaying retirement despite not having clarity around what their pensions are worth or having a clear retirement income goal in mind. This highlights the important role of guidance in helping individuals understand whether retirement is affordable and giving them greater confidence in their decisions.” 

The research follows recent analysis from the Pensions Policy Institute, which found that well-designed, guided retirement solutions can improve retirement outcomes when introduced at the right stage of an employee’s journey. However, Watts-Lay believes many people will continue to require personalised guidance, particularly as increasing numbers of workers build up multiple pension pots throughout their careers. 

He said employers also have an important role to play. 

“Unfortunately, a significant number of employees feel unsupported by their workplace when it comes to pensions,” Watts-Lay explained. “By putting the right support in place, employers can help people to build their understanding and confidence ahead of key decisions. 

“We are finding that demand for retirement guidance services is increasing in the workplace. This kind of support, alongside digital tools, is likely to become increasingly important as more structured retirement solutions are introduced.”