Do you recognize your employees fears about retirement?
21st July 2015
Most of us have a target of the age we think we’ll be when we retire however recent research suggests more of us are uncertain about the age we’ll be when we come to retire.
The recent research, carried out by Aegon found that around 64% of workers today feel concerned about their retirement age with research suggesting that today’s average retirement age of 63 will increase to 65 by 2018 for both men and women.
More people are anticipating their employers will start to introduce part time working conditions for employees reaching their retirement age with as many as 36% of employees anticipating having to work beyond their retirement age.
Those workers who expect to finish working soonest are those working in the finance sector who have an average salary of £38,000, with finance workers expecting to retire at around 62 with workers in education who earn an average annual salary of £26,000 and have an expectation to retire at around 64.
It’s notable that average pay doesn’t seem to correlate with the time at which the worker expects to retire with those employees working in admin, who earn an average annual salary of £23,000 expecting to retire at 63.
Aegon UK managing director, workplace pensions, Angela Seymour Jackson said “With so many expecting to work on past traditional retirement age on more flexible contracts, employers will need to move quickly to accommodate this new later-life work culture,” she said.
“Creating a flexible and inclusive workplace strategy won’t only benefit those working longer to hit their savings targets but, according to recent research, will also prove good for business, adding £100 billion to UK productivity.”
She added: “While there are benefits for the economy in older people staying in the workforce, it should be a matter of choice as to whether people continue working and not simply down to a lack of savings. For this reason it’s important that pension providers and employers engage workers early with their pension in order that they understand how on track they are with their savings.”
The report was released to coincide with data released by Department of Work and Pensions (DWP) which demonstrated in 2013 there was an additional £3.1bn saved in pension pots in 2014, with a total annual contribution of £42.9bn.
Interestingly, the biggest growth in age ranges participating in pension schemes is in those aged between 22 and 29 which demonstrates that younger people are beginning to clearly see the potential pitfalls they may have in the future when they come to retire and benefiting from the DWP’s auto-enrolment scheme which requires an employee to opt out of a company’s pension scheme.
Hargreaves Lansdown head of corporate pension research Nathan Long said “The large increase in participation in young and low-paid workers is particularly pleasing. Thought must now turn to ensuring these people who are new to pensions are given the help they need to make confident decisions when they come to retirement.”
It’s important that HR managers continue to understand and recognise the concerns both younger workers and olders have surrounding retirement as there is a clear opportunity for those companies that better that develop policies which mitigate employees’ fears.