To explore the reality of defined contribution (DC) pension provision and wider financial wellbeing today, Aon and YouGov surveyed over 2,000 employees across a wide range of age groups, incomes and industries.
The resulting report — which also draws on wider Aon and external research, as well as the views of Aon’s DC experts — provides an insight into the current financial position and pension planning of the UK’s employees. Some of the headline findings may be surprising or even shocking and should not be ignored.
This report is split into five sections exploring a range of key themes, each including a checklist of potential actions:
We hope you find the survey results interesting and useful. We would be happy to talk them through with you, to put them into context for your own employees and pension scheme members. We can also help you to understand where you and your employees need to take action to ensure their retirement savings remain on track.
Senior Partner and Head of DC Consulting
There is a serious issue with retirement affordability
above average level of support
to see if they were impacted
nothing preventing them
from saving more
Pension strategy and long‑term objectives
Pension schemes have had to deal with a lot of substantial challenges during 2020, including adjusting to remote working for administration and decision making, as well as navigating the turbulent investment markets. In some cases, this has left those running schemes unable to focus on anything but the short term.
The COVID-19 pandemic has shone an intense spotlight on workforce resilience in a way we have never seen before. Leaders are now far more aware of the fragility and dependence of businesses on a healthy and financially well workforce. Smart, strategic investment in the health and wellbeing of your workforce is more than good housekeeping, it is part of what makes a business thrive.
“You may already have lots of support in place, but does this meet the needs of your workforce? Collecting and analysing the data you have available and looking at this holistically can help you to determine what is working and what is not, and to change your support appropriately.”
Investing for the right pension outcomes
To say that 2020 was an interesting year for investment markets is putting it mildly to say the least. Over February and March 2020, equity markets experienced the fastest and sharpest falls in history. So how did pension members react and what can schemes do to support them?
Communications and engagement
Communicating in the right way is crucial in helping pension scheme members understand when they need to take action. A huge 71% of employees have not set a goal for how much money they will need to save before they fully retire. It is evident that focused and clear communication is needed in DC pensions.
Getting retirement right
We are experiencing a fundamental shift in the way that people move from the world of work into retirement. This is no longer a one-off event at a specific age, but increasingly a phased move taking place at ever older ages.
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