Just nine per cent of people in the construction and property sector are financially on track for the retirement they aspire to have, unchanged from April 2015 and now lagging behind the UK average of 12 per cent, according to new research from Aegon UK*.
However, there is evidence that the pension freedoms**, introduced in April 2015, and initiatives like workplace auto-enrolment*** for employees are having the impact the government intended. One in seven (14 per cent) construction and property professionals are saving more into their retirement pot as a direct result of the pension freedoms.
Pension savers working in this industry, have also become more realistic about the retirement income they expect to receive. Average annual income expectations within this sector have fallen from £46,000 in April 2015, to £40,200 in the past twelve months.
Despite these reasons for optimism, engagement levels remain low. Under a quarter (23 per cent) have checked the performance of their retirement savings within the last six months, while 21 per cent have taken steps to review their plans for retirement, trailing the UK average of 24 per cent and 22 per cent, respectively. These factors all contribute to the construction and property sector having an average readiness score of 54.
Steven Cameron, Pensions Director at Aegon UK, comments: “As we enter an era of personal responsibility for retirement saving, it’s heartening to see the pension freedoms are having a positive effect on saving behaviour, with 14 per cent saving more into their pensions in response to the freedoms, but this needs to be a lot higher if we’re to see real change. For people in the construction and property sector the pensions penny is yet to drop, with some of the lowest engagement levels. Workers in this sector need to revisit their retirement plans before it’s too late.
“The stark reality is that 91 per cent of workers are falling short of their retirement targets; targets which are themselves very stretching. In this sector there is a job to be done to lay solid foundations on which to build realistic retirement plans.”