Fewer than one in five (18%) employees with a workplace pension have a clear retirement plan, despite more than half (51%) having given a lot of thought to their financial needs in later life.
New research from Royal London suggests many employees are engaging with retirement but struggle to translate that into action.
The report: ‘Workplace Pensions – Retirement Ready?’ published today, found that employees aged 35-49 were the least likely to have a clear retirement plan, with just 13% saying they have one.
Worryingly, nearly two-thirds (64%) of employees have never looked for advice or support on how much they should save into their pension or to understand their options at retirement.
The report also highlights a disconnect between retirement aspirations and expectations. Employees would ideally like to retire at age 62 on average but realistically expect to work until age 65.
Rory Marsh, workplace pensions director at Royal London, said: “There's now a growing need to focus on what happens beyond joining a pension scheme by helping employees understand what they might need to enjoy a comfortable retirement.
"The gap between engagement and action is an important challenge for employers, advisers, and pension providers.”
He said the challenge is not necessarily getting younger employees engaged but helping them turn that engagement into a clear retirement plan and confidence that they are on track for later life.
Mr Marsh added: "The opportunity now is to help more people understand whether they're on track, what retirement might realistically look like for them and what practical actions they can take today to improve their future prospects."
• Research was carried out by Opinium between 13 to 27 July, with 3,500 employees with a workplace pension.