More than half (55%) of employees said a retirement plan is more important than ever as 49% of workers aged 50 and older have already started phasing into retirement, according to research by global advisory and broking firm Willis Towers Watson (WTW).
Its 2024 Global benefits attitudes survey, which surveyed 6,000 UK employees working at medium and large private sector employers, also found that 17% of respondents in this age group have either already started phasing into retirement by reducing their working hours or job responsibilities, while 32% want to do so. Those who started phasing into retirement at age 56 expect to work 10 more years, with similar results for workers who want to phase into it when they are older.
Overall, three-quarters (75%) of those currently phasing in have reduced their work hours and 31% have reduced job responsibilities, while fewer want to change to a different role in their industry or change where or how they work. When asked what was driving their decisions about when and how to retire, the top reason was financial security (68%) followed by health (61%).
Four in 10 (39%) of respondents aged under 50 expect to work past age 70, a rise from 27% two years ago. More than three-quarters (79%) are not saving as much for retirement as they should be, while 47% are on the right track to retirement.
More than half (55%) said their employer-provided pension is more important than ever, and 70% said it is the primary way they save for retirement, while 41% cited their pension as an important reason to stay with their current employer.
Helen Holman, head of defined contribution consulting at WTW, said: “Phased retirement can be a win-win for both employees and employers. These findings show that employees are recognising they might need, or want, to re-think when and how they retire to balance all their needs in later life, including financial.
“What’s clear is that employees still consider their employer’s pension scheme as their primary savings vehicle for retirement and more can be done to ensure better outcomes from these. While increasing costs might be challenging, some employers might prefer to invest in employees’ retirement provision now, rather than bear the cost of an aging workforce later.”
