New multi-country research on consumer, business leader and public sector leader views provides actionable insights on how to address the financial savings gap.
Mercer, a global consulting leader in advancing health, wealth and career, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), today announced findings from a new survey focused on financial security.
Mercer’s Healthy, Wealthy and Work-wise - new global research identifies critical imperatives for financial security in the areas of health, action, technology and structures. The study, which was conducted across 11 countries, 7 regions with 7,000 adults 18+ and 600 senior decision makers from private and public sectors, showcases relevant data and outlines potential actions to improve financial security, including the following findings:
- Seventy five percent of adults will not have enough money to retire: People expect to spend 15-20 years in retirement, but without better planning, many will outlive their income. With personal savings not enough, research demonstrated that only 26% of adults surveyed were confident they could save enough for retirement.
- The retirement age is gone: The expected retirement age no longer applies, as people are working longer either out of choice or from economic necessity. Nearly two-thirds (68%) expect to keep working in some capacity or never retire. As working longer requires a degree of physical fitness, health is now vital to wealth. Yet only 39% profess to be in excellent/good enough health for the job they have today.
- People are not proactively saving: Eighty one percent of adults feel personally responsible for their retirement income, yet many do not take requisite actions. Various factors (stress, affordability, access and confidence in investing, age, gender and stage of life) affect people’s ability to save and invest. Currently, one-third have not made any later-life financial calculations – and the largest work force segment (millennials) change jobs more frequently which also has significant impact on savings. Women face a gender gap in salary inequity and career continuity; and “gig” or informal economy workers are virtually on their own.
- Employees trust employer savings advice: Survey results demonstrate that people have a high degree of trust in employers’ advice, with 79% of those surveyed claiming they trust employers to give sound, independent advice on planning, saving and investing, and to negotiate rates. This data point demonstrates opportunities for employers to play a crucial role in addressing current investment roadblocks for individuals.
- Everyone must pitch in: Individuals, employers, governments must work together to ensure financial security for all. Innovation, technology, new ways of thinking and cultural adapting all play a part in reinventing expectations to meet new realities.
“The current state of financial security calls for revolution,” said Renee McGowan, Global Head of Individual Wealth, Mercer. “The good news is that if action is taken now, there are opportunities to address the financial savings gap and put us on a path that runs concurrently with today’s cultural norms. Society is changing – and our approach for savings and financial security should change right alongside it.”
The results from the research call for significant and immediate action to resolve the current, global financial savings gap.
“The catalyst for our research was the convergence of several global trends including economic uncertainty, pension shortfalls, people living longer, ageism and reductions in employee benefits among other factors. These trends intersect health, wealth and careers, so planning for financial security must account for each of these core areas,” said Rich Nuzum, President, Wealth, Mercer. “The existing expectation to retire at a certain age no longer applies. As people live and work longer, it is time to retire the concept of retirement as we currently know it. To live well later we need to act now – and responsibility to act is incumbent across the private sector, public sector and individuals.”
The Healthy, Wealthy and Work-Wise: The New Imperatives for Financial Security research and methodology can be found here.
Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 22,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With more than 60,000 colleagues and annual revenue over $13 billion, through its market-leading companies including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.|