The study for investment provider Close Brothers suggest millions of people have re-evaluated their retirement date since the pandemic and subsequent cost of living crisis.

One in four employees (25%) admit that their retirement plans are “not on track” and 41% of over-55s are worried they will not have enough money to ever afford to retire.

Key findings from the report include:

• 18% of UK employees and 32% of those aged 55+ have deferred their retirement date since the pandemic
• 35% of employees are worried they will not be able to afford to retire, increasing to 41% for the over-55s
• 25% of employees admit their retirement plans are not on track

The new report, Spotlight on UK Financial Wellbeing by Close Brothers’ Workplace Financial Wellbeing Services, looks in depth at the current state of retirement in the UK.

The research reveals that for many UK employees, decisions around retirement are being hampered by, “confusion, indecision and anxiety, and this indecision is negatively impacting businesses,” according to Close Brothers.

Overall the pandemic and economic uncertainty have resulted in “greater insecurity” around retirement, says Close Brothers.

Almost a quarter of all employees (23%) have changed their retirement date recently, with 18% deferring it.

Those approaching retirement are most likely to have changed their plans. More than one in three (36%) of employees aged 55+ have changed their retirement date with most deferring it (32%).

One in 10 (9%) are currently “undecided, uncertain and anxious”. Of those over-55s who have pushed their retirement date back, most say it’s because they cannot afford to retire right now.

Of the small percentage of the same group who have brought their retirement date forward, most say that they have done so because ‘life is too short’ (47%).

Not being able to afford to retire is one of the most common financial concerns, with one in three (35%) employees across the country saying it is front of mind. This jumps to 41% of employees aged 55+.

One in four (25%) employees admit their retirement plans are not on track and one in 10 (10%) say they have no retirement plans at all. Some 27% of employees over the age of 55 feel their retirement plans are not on track currently.

Close Brothers says the ongoing uncertainty around retirement is having consequences for businesses, which could have cost and retention impacts over time.

Companies are currently experiencing blocks on succession (22%), and while companies value retaining experienced workers (28%), there are some side-effects in engaging a higher proportion of senior workers for longer, with a higher average payroll (23%) and an increase in healthcare costs (18%). Companies are also experiencing difficulties in recruitment and talent development (30%), because there is less turnover of senior personnel.

When it comes to retirement, for 21%, understanding their choices and knowing how to make a good decision is key when it comes to planning. Half (54%) of employees say that knowing whether they would actually be able to afford to retire and, if so when, would bring a real sense of security; this is particularly the case for women (66%) who want that certainty.

Nearly half (43%) of employees want pension advice, but only a small number of companies offer it; just 22% of organisations offer financial advice with a pension provider, 17% offer financial advice with a financial education provider and just 16% give pre-retirement seminars. Only 13% provide a helpline to a pension provider and only 9% offer a talk from a workplace pension team.

Jeanette Makings, head of workplace financial wellbeing, said: “Our report shows that anxiety has increased significantly when it comes to retirement decisions. It’s a weighty responsibility and the impact of getting it wrong is immense; it’s understandable people are feeling the pressure. And now, with the possibility of a one pot pension, and yet more control being put into the hands of employees, the need for support, guidance and advice has never been more critical.”

• The report is based on surveys conducted among 1,009 employees from companies with 200 or more employees and 504 employers with 200 or more employees. The research was carried out on behalf of Close Brothers Asset Management by YouGov between the dates of 15 June and 31 July 2023.