56% of construction & property workers face pension gap01 July 2015 Back to results
- Over half (56%) do not consider their company pension their main method of retirement
- Less than two in five (35%) workers showed any confidence about retiring at their target retirement age
- Construction and property workers face a £33,000 shortfall in the retirement income they want
Aegon UK’s third Readiness report investigates how ready people working in a range of professions are for the retirement they want.
Importance of workplace pensions
Less attention is paid to company pensions by construction and property workers than those in other industries. Just over half (56%) of those in construction and property said their company pension was not their main method of financing retirement. However for many professions, a company’s workplace pension is important; 61% of people who work in the education sector said it was their main method of retirement saving, compared with 69% in financial services and 67% in healthcare.
A lack of engagement may be the driver for workplace pension inertia within this sector, with three in five (65%) not having any idea of the proportion of their salary their employer was contributing toward their pension, the highest out of all the professions.
However, nearly two in five (17%) people who work in the sector said that they would be willing to increase their pension contributions beyond the new auto enrolment contribution amount of 5% of salary due to be enforced from 2018.
When it comes to the income people hope to receive in retirement, those working in construction and property have among the most ambitious expectations, aiming to receive £46,000 per year. However this is significantly above the £13,000 they are on course to receive and more than double an average construction workers salary of £20,000.
By 2018 the state pension age will be 65 for both men and women. According to Aegon’s survey, construction and property professionals expect to retire at 64, four years earlier than the state pension age for a thirty year old today. As a result, just over a third (35%) of workers showed any confidence about retiring at their target retirement age, the lowest out of all the professions only matched by those who work in healthcare.
Angela Seymour Jackson, Managing Director Workplace Pensions, Aegon UK said: “It’s worrying to see that workplace pensions don’t figure much in the agenda for those in the construction and property sector and this may be feeding into their lack of confidence towards retiring at their target retirement age. Their lack of confidence is unsurprising, as the expectations they have for their retirement age and annual retirement income appear at odds with reality. The industry needs to put more focus on supporting employees get to grips with their pension savings. There needs to be more attention placed on giving people access to view and manage their workplace retirement savings online or on their mobile. Employers are well placed to support people get ready for retirement and our new service Retiready, provides a digital interface that employers can use to give their employees more control over their pension.”
How other professions stack up
Monthly retirement savings by profession
£234 Banking & financial
£74 Creative arts & design
£95 Social care & guidance
Pension pots by profession
£43k Engineering, manufacturing & production
£40k Banking & financial
£38k construction & property
|Profession||Average Readiness Score|
|Advertising, marketing and PR||49%|
|Animal and plant resources||50%|
|Banking, financial management and accountancy||54%|
|Charity and voluntary work||50%|
|Construction and property||48%|
|Creative arts and design||49%|
|Engineering, manufacturing and production||54%|
|Hospitality and events management||47%|
|Human resources and employment||49%|
|I am unemployed||38%|
|Profession||Average Readiness |
|Insurance and pensions||56%|
|Law enforcement and protection||54%|
|Leisure, sport and tourism||50%|
|Management and statistics||57%|
|Media and broadcasting||41%|
|Mining and land surveying||57%|
|Publishing and journalism||47%|
|Retailing, buying and selling||48%|
|Social care and guidance work||49%|
|Transport, logistics and distribution||52%|