“The survey demonstrates the benefits of habitual saving and highlights the need for making it a global trend,” Mike Mansfield, manager of retirement research at the newly founded Aegon Center for Longevity and Retirement, told attendees of a media event announcing the findings of the Aegon Retirement Readiness Survey 2015.

Catherine Collinson, executive director of the Aegon Center for Longevity and Retirement, and president of the Transamerica Institute, shared that the 2015 findings reveal a slight continuing improvement in people’s sense of retirement readiness as measured by the Aegon Retirement Readiness Index (ARRI), created in 2012. The overall score was 5.9 out of 10, with India scoring highest at 7.0, Japan scoring lowest at 4.8, and the U.S. scoring 6.5.

“We believe the slight increase is due to optimism in the improving economy rather than changes in behaviors,” Collinson said.

According to the survey report, as many as four out of 10 people are not saving anything for their retirement, but half of these non-savers have aspirations to save for retirement. Financial considerations such as receiving a pay raise (45%) or more generous tax breaks (33%) would help to unlock the savings potential of many non-savers. Simplifying investment products could encourage a further one-fifth of non-savers to start saving. 

Three-quarters of people who are habitual savers achieved a medium or high ARRI score compared with fewer than half (46%) of those who save on an occasional basis. “Habitual savers are role models for others to follow,” said Collinson.

She noted that many people still fail to properly plan for retirement—39% of survey respondents have no written strategy for retirement at all, and 43% have a strategy, but it is not written down. Nearly six-in-10 (59%) reported they do not have a backup plan if forced into retirement, 31% said they would rely on their savings (61%), and 30% would rely on their spouse’s income.

Making habitual savings a trend is a shared responsibility between individuals, employers and governments, Mansfield contended. The survey report recommends governments can help by reducing the cost and regulatory burdens for employers to implement workplace savings plans, and by implementing reforms to enable employees to work longer and phase into retirement.

Employers can design plans to promote habitual savings by using automatic enrollment and automatic deferral escalation. They can adopt age-friendly workplace policies to encourage working longer and phasing into retirement, and offer financial wellness programs and engage advisers to help employees with financial planning.

Workers should save early and use financial planning tolls to establish a retirement strategy. Parents should teach their children to save early and habitually.

According to Collinson, the survey reveals a key opportunity for employees to encourage aspiring savers to become habitual savers—59% of aspiring savers find auto-enrollment at a 6% deferral rate appealing, and 53% find it appealing at an 8% deferral rate. She noted that aspiring savers tend to be younger and women— the median age is 35 years and 58% are female.

Collinson added that the survey shows employers make a major contribution toward improving the financial wellbeing of employees in retirement, but some offer benefits employees don’t know about. Employers need to promote more the available benefits and provide employees with financial planning and advice support, she suggested.

Providing employees the opportunity to stay in paid work is essential, Collinson said. Employees can boost their savings or bridge savings shortfalls by working longer. However, only 24% of survey respondents indicated their employers allow them to shift from full-time to part-time work, and only 19% said they are offered flexible retirement.

Finally, Collinson noted that health is a key determinant of a prosperous retirement—42% of respondents in excellent health indicated they are confident they will live comfortably in retirement, compared to 7% in poor health.

Among U.S. respondents, the survey found:

• Thirty-one percent do not have a plan for retirement, 21% have a written plan, 44% have a plan that is not written;
• Forty-two percent of retirement income is expected to come from the government, 29% from workplace retirement plans and 29% from savings and investments;
• Forty percent have a backup plan if they are forced to retire early, 53% do not;
• Of those who do have a backup plan, 59% say it is their own savings, 29% say it is their spouse’s income, and 26% say it is early withdrawals from retirement accounts;
• Fifty-two percent are habitual savers, 20% are occasional savers, and 11% are aspiring savers;
• Nineteen percent say they are saving enough for retirement, 15% are hardly saving at all;
• Forty-four percent say a pay raise would encourage them to save for retirement, 30% say tax breaks will, and 27% each cite a retirement plan match from their employers and more certain economic conditions;
• Seventy percent find automatic enrollment in a workplace retirement plan at a 6% deferral rate appealing; and
• Thirty-four percent are very or extremely confident they will have a comfortable lifestyle in retirement, while 11% are not at all confident.

The Aegon Retirement Readiness Survey 2015 was conducted in 15 countries between February 6 and 23, among 16,000 survey respondents. There were 1,000 respondents per country—900 non-retired and 100 retired—except in China, where there were 2,000 respondents. The survey report is here.