The landscape for retirement is undergoing a seismic shift at present. The abolition of the default retirement age and the new freedom of pensions legislation are both indicative of a culture that may start to view the decision to retire in a rather different light. Until very recently, many employees considered retirement to be a binary decision — working one day, retired the next. Yet statistics suggest that this is now changing, with the road to retirement moving from cliff-edge decision to a gentle downhill stroll for older workers.
The DWP findings appear to support this. Key findings are:
- Nearly half (48 per cent) of over-50s want to keep working between age 65 and 70
- Only 17 per cent say that working full time and then stopping work altogether would be the best way for them to retire
- 36 per cent of retirees say their advice to others would be to consider switching to flexible or part-time work for a period before stopping work altogether
It is also useful to appreciate that the desire to continue working is not always driven by personal finances alone. The statistics show that a third (33 per cent) of those working aged 70 and over did so because they enjoyed it.
This is important data — and something that employers really need to understand. Population demographics in the UK suggest that older workers (those aged 50 and above) are set to form a much greater chunk of the UK workforce in the very near future. This grouping of older workers currently comprises around one in four or the UK workforce, and this is predicted to increase to circa one in three by 2020.
It therefore follows that employers will need to ensure that they retain the best of their older workers if they are to remain competitive. And for many that will mean that pay and benefits offerings — and indeed training and career progression opportunities — will have to be reconsidered for those aged 50 and above.
This is not without its challenges for many employers. The DWP survey found that a significant minority (15 per cent) of older workers report age-based discrimination in the workplace, and 23 per cent feel they are viewed ‘less favourably’ than younger workers.
Sadly, this is not particularly surprising. The 2014 Jelf Employee Benefits Survey found that 21 per cent of employers restricted some employee benefits to those aged 65 or above. While legislation allows employers to do this, the perception among older workers who are aware of such limitations may well be one of age discrimination. Such perceived slights will probably damage employee motivation, engagement and productivity. This is therefore a key area for all employers to consider.