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A tough ask: saving for an ill-defined event at an indeterminate date
9 April 2021

A tough ask: saving for an ill-defined event at an indeterminate date

How can you encourage people to save for retirement when they can’t be sure what retirement will mean, when it will happen, or how much they’ll need for it? Laura Stewart-Smith, Aviva’s Head of Workplace Savings and Retirement, looks at recent research to understand this dilemma – and how we might resolve it – within our present age of ambiguity.

Uncertainties – including those centred around financial issues – can have a strong negative influence on our mental wellbeing. And if there’s anything we can confidently state about the present time, it’s that there’s no shortage of uncertainty. But not all of this is a consequence of the trying circumstances we’re currently facing. In many ways, we had already entered an age of ambiguity when the COVID-19 pandemic arose.

Some events that happen to us, though eminently more predictable, are by their nature a potential threat to financial wellbeing. One of these is retirement.

Aviva’s Age of Ambiguity research told us that 78% of participants felt that they would have to work longer than they thought before being able to retire. Perhaps even more worryingly, less than a third (only 28%) said they knew how much they would need to save to fund their desired lifestyle in the years after work.

“We’re not even sure what the word retirement means any more.”

We might be excused for thinking that, in a world where auto enrolment has forced the hand of many to join a pension scheme, there might be a greater degree of certainty over retirement provision. But that word ‘retirement’ is now, in itself, ambiguous. It no longer means an abrupt exit from the workplace at the age of 60 or 65.

For some, retirement now leads to a change in career, rather than sitting back and relying on a pension. Or it might signal a gradual reduction in working hours; a shift towards voluntary work; even a new business venture. And the timescale over which these changes will happen is no more certain than their nature. Many don’t know what they’ll do until the situation is upon them.

One great unknown is the age at which retirement will happen. Some might aim for a certain age – 65, perhaps – but this need no longer tie in with state pension. It could be planned to coincide with another person’s circumstances, or it may be dictated by health. Nowadays, it is far less likely that there will be genuine certainty around any of this.

“We’re asking people to plan for an unknown amount of money, to provide an unknown amount of income, at an unknown date, to meet unknown requirements.”

Those of us involved in encouraging people to plan for retirement understand how challenging this task can be when so many variables are in play. Of course, like other forms of investment, there is a measure of uncertainty intrinsic within a Defined Contributions (DC) pension. The move away from Defined Benefits (DB) - where a greater level of predictability was assured – has brought into play a fresh set of variables.


Outcomes depend on a number of factors, including the investment return achieved.

But when the objectives of retirement saving are no more clearly defined than the outcome, it’s a tough ask indeed. Is it really all that surprising that getting engagement with a set of unknown requirements and objectives isn’t always the easiest thing?

But there may be ways to make the task easier which more of us could adopt. Aviva’s Age of Ambiguity research highlights the importance of pointing employees in the right direction – and suggests that there’s now a greater need than ever to get this right. The report showed that fewer people now expect to be reliant on their employer to help them financially plan (9% in August 2020, versus 14% in February).

“Employees need guidance as well as an efficiently run pension scheme”

This trend threatens to leave many feeling unsure where to turn to for support. Aviva’s findings suggested that employees appreciate the effort put into running their workplace pension scheme, but they don’t feel that employers consistently extend the same effort on providing the guidance that makes sense of it all. They want to know how to use available resources effectively to plan for retirement, and finance in general.

As individuals, each of us can reduce the ambiguity we experience by making the most of the resources available to us. But it’s not solely down to the individual. Employers, pension providers and advisers can all play a part in encouraging engagement with workplace pensions and thereby removing some level of uncertainty from the ambiguous world of work in which we now find ourselves.

For example, we need to raise awareness of the tools available to employees. These may include online calculators, to help them understand the amount of income that might be available through their pensions or other assets. Another route would be to promote financial education sessions, aiming to improve knowledge levels on the issues surrounding retirement planning.

There’s plenty we can do to embrace the age of ambiguity and help employees to improve their financial wellbeing in this environment… tough ask though it may be. Most importantly, we can help to mitigate some of the uncertainties of working – and post-work – life by encouraging flexible planning. It’s always easier to tweak a plan than to start from a blank sheet of paper further down the track.


Age of Ambiguity report

This article was featured in Pensions Aspects magazine April 2021 edition.

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Last update: 7 April 2021

Laura Stewart-Smith
Laura Stewart-Smith
Head of Workplace Savings and Retirement

Client Director, Trustee Executive

Salary: £80000 - £130000 pa

Location: Work from home, with travel to client meetings/office as required

Senior DB Pensions Technical Admin., 2-3 days from home

Salary: £25000 - £38000 pa

Location: East Sussex, 2-3 days work from home

Pension Administrator (Hybrid Flexible Working Option)

Salary: £27000 pa

Location: South Yorkshire (with Hybrid Flexible Working Option)

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