Unaffordable retirement will impact firms’ ability to recruit staff

According research by Hymans Robertson two-thirds of respondents to believe that almost half their workforce will be unable to retire at the state pension age due to inadequate pension savings.

Its research, conducted among 200 HR directors and managers, found that 78% of respondents have considered the impact this would have on their organisation.

More than 70% of respondents said this would impact their ability to take on younger employees and graduates, while more than a third said it would negatively impact on productivity.

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The research comes as Hymans Robertson launches Guided Outcomes, a product to help employees manage their defined contribution (DC) pension scheme and set a target in order to achieve an adequate income in retirement.

Lee Hollingworth, head of DC consulting at Hymans Robertson, said: “Over the next decade, the number of people retiring on a DC pension is set to escalate and, as things stand, many people will find they have not saved enough and may need to delay their retirement.

“Everyone knows that the shortcomings of the DC system are a big issue for individual savers, but the impact this could have on employers and younger generations of job seekers is less widely discussed.

“It is essential that we take action now. Employees care about how much they will get in retirement, but often aren’t saving enough. There is a clear need for a new approach to DC governance practice that enables employees to easily manage their pension saving more effectively to stay on track to achieve an appropriate retirement income target.”