GLOBAL - Worldwide employees' lack of understanding in financial matters is hampering their saving enough for retirement, according to Larry Zimpleman, president of retirement and investors services at Principal Financial Group.
The key to solve the problem is education, said Zimpleman at the Global Financial Leadership Forum in London. It strikes me as odd we teach languages, science, and maths but we don't teach financial literacy.
Principal has combined research data from its own quarterly Global Financial Well-Being Study derived from data culled from employees in the US and its annual survey of employees in 11 countries worldwide - Brazil, Chile, China, France, Germany, Hong Kong, India, Italy, Japan, Mexico and the UK.
People don't realise the implications of increased longevity, said Zimpleman. The previous generation could expect eight or 10 years of retirement. It's reasonable to expect 15-20 years today.
The research shows demographic changes impacting further on pensions: the number of over 60s in many developed countries are projected to grow by 20 to 43% by 2050; in the US male life expectancy will increase by 15 years between 2000 and 2040.
The introduction of DC schemes is also influential in increasing people's capacity for taking responsibility for retirement finance:
Principal Financial Group's experience around the world is where a DC scheme allows workers to take more control, they save more, said Zimpleman.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.