A mere 9% of those in the construction and property sector are financially on track for the retirement that they aspire to have, but the Government’s pension freedoms and auto-enrolment schemes are having the desired effect.
The research, carried out by Aegon UK, revealed that the construction sector is falling behind the UK average of 12% for those on track to achieve the desired annual income in retirement of £38,000, aligned with a general lack of engagement, as under a quarter (23%) have checked the performance of their retirement savings in the last six months.
However, there is evidence to suggest that Government moves such as the April 2015 change in tax rules – giving people greater access to their pensions – and the automatic enrolment scheme, which makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme, are having the impact the Government intended. One in seven (14%) construction and property professionals are saving more into their retirement pot as a direct result of the pension freedoms.
Furthermore, pension savers working in the industry have also become more realistic about the retirement income they expect to receive as average annual income expectations have fallen from £46,000 in April 2015 to £40,200 in the past twelve months.
Steven Cameron, pensions director at Aegon UK, commented: “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% 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% 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.”
