According to research by employee risk and benefits management firm Aon Consulting, European governments and employers are failing to educate their citizens and workforces sufficiently about the long-term value of their pensions.
The research, which focuses on the views of workers across Europe on topics such as retirement, employee benefits and other pension-related issues, indicates that less than a quarter of European workers are interested in their pension. It forms part of the European Employee Benefits Benchmark, a survey of more than 7,500 workers from 10 of Europe’s leading economies: Belgium, Denmark, France, Germany, Ireland, The Netherlands, Norway, Spain, Switzerland and the UK.
Britain, France and the Netherlands are failing to foster a sufficient long-term retirement savings culture despite the financial turmoil brought about by the Credit Crunch, with only 12% of people taking an active interest in their pensions. This compares to 37% in Germany, the highest in Europe, Belgium (34%) and Switzerland (33%).
Despite the importance of financial planning for retirement, and the general trend of less state support in retirement, 16% of people say they do not have a pension plan in place because they can’t afford to save, 11% because they simply never got around to it, and 5% claim they have actively made the decision to rely on state benefits, leaving them at the whim of the government of the day. Perhaps not surprisingly, the trend across Europe sees fewer 18- to 35-years-olds with pension savings than people in higher age brackets.
Oliver Rowlands, head of retirement, EMEA, at Aon Consulting, said, “A lot of people will simply be walking blindly into retirement poverty unless they take more of an active interest in their pensions. Governments and some employers across Europe are looking at ways to reduce their pensions obligations, so it is imperative that people take more responsibility for their own retirement finances.
“Many employers continue to take the provision of appropriate pensions for their employees very seriously, and are spending a lot of money to provide for the long-term welfare of their workforce. Although workers do generally value employer-sponsored pensions, both defined benefit and defined contribution, they tend not to manage their affairs until close to retirement, when it is already too late. Employers need to effectively communicate the value and choices relating to this benefit through open, honest, clear and continuous communication to their employees in order to make it an effective weapon in their arsenal in the war for talent. At the same time, they need to ensure they are educating and helping their workforce take the necessary steps to take appropriate and necessary action around retirement savings.”
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