Posted on 16 Jun 2010
More than half (55%) of Europeans believe they will have to delay their retirement because of the current economic climate, according to Aon Consulting, the leading employee risk and benefits management firm. French and German workers are the most pessimistic, with 74% and 73% thinking about extending their working careers respectively, followed by the Irish (65%), the Swiss (67%) and the British (60%).
Of those who believe the economic situation will force them to delay retirement, the Irish and the British have the most gloomy outlook with nearly 90% and more than 80% of workers respectively saying they think they will have to delay retirement by over two years.
This research is part of the Aon Consulting European Employee Benefits Benchmark, a survey of more than 7,500 workers from across Belgium, Denmark, France, Germany, Ireland, The Netherlands, Norway, Spain, Switzerland and the UK, ten of the leading economies in Europe. The Benchmark focuses on the views of workers across Europe on topics such as retirement, employee benefits and other pension-related issues.
Previous results from the Benchmark revealed just how averse to working longer Europeans are, with nearly one in three (29%) European workers stating they would rather retire earlier and receive less income in retirement than have their government extend the minimum retirement age in their country.
Right across the region, except in Ireland, females are more likely than their male colleagues to claim they will have to delay retirement. In many cases, this could be attributed to the fact that women are more likely to have lower pensions as a result of either spending less time in the workforce or having a part-time job. The effect of the financial crisis becomes even more pronounced in this type of situation.
Oliver Rowlands, head of retirement, Europe Middle East and Africa, at Aon Consulting commented: “Recent events have shown the value of defined contribution pension funds can go down sharply in a recession, which has come as a shock to many people used to gold-plated defined benefit pensions and generous state benefits. As responsibility for retirement savings has moved from the state and corporations to the individual, people are increasingly realising they need to take an active interest and take steps, such as delaying retirement, to make sure they are financially secure in retirement.
“For those aged 40 or younger, pensions may not be top-of-mind, however now is the time to begin setting up a savings plan, particularly as the end of defined benefit pension schemes is increasingly a reality. Those closer to retirement should seek advice based on their personal circumstances and may want to consider moving their retirement investments out of riskier investments in to lower risk investments which will offer greater protection in the period to retirement. Finally, for those on the verge of retirement, many will seek to convert their retirement savings to an annuity, which pays them an annual income. The price of annuities can shift from day to day and vary significantly depending on the provider, so shopping around is a must, in order to get the most out of a lifetime’s worth of saving.”