New research from Canada Life Group has revealed that people are planning to take advantage of the opportunities offered by the end of the default retirement age, with over a third (35%) of employees believing they will work past the age of 65. This will force employers to take the implications of having an older workforce into account in terms of the benefits they offer, with some benefits likely to become more expensive.
Lack of understanding:
Despite the fact the change occurred a year ago, 48% of workers were not aware that the default retirement age had been scrapped. This suggests that while many people may wish to work longer, some may not be aware of the option and simply retire as they think they should.
Men in particular feel they are more likely to continue working for longer as a result of the removal of the default retirement age, with 44% agreeing they would still be working past their 65th birthday (women 31%).
Implications for rest of the workplace
However, some people believe that an older workforce will create problems, particularly for younger employees. Nearly a third (29%) feel that having people remain in work past the age of 65 will make it harder for younger people to move up the career ladder, especially in light of the current unemployment figures. The older generations – potentially as they intend to keep working – are most likely to feel this way, with 43% of those aged 51-60 forecasting a ‘job-blocking’ effect.
Others expect that having older workers will change the working dynamic, with a fifth (20%) forecasting changes because older people may have more health issues. As a result, 27% of workers think that employers will be forced to hand out incentives in order to encourage people to retire, with nearly a third (31%) of 51-60 year olds believing this will be the case.
Paul Avis, Sales and Marketing Director at Canada Life Group Insurance comments;
“It is evident that many UK workers intend to take advantage of recent changes to the default retirement age and work past the age of 65. Whether this will have a positive or negative effect on younger workers remains to be seen, but it is inevitable that having an older workforce will have implications on the kind of benefits that employers can provide.
“For older workers, healthcare provision and group protection products such as critical illness cover will become an increasingly attractive part of their employment package. If a substantial rise in the number of older workers should occur within the workplace, employers will find it hard to avoid providing these types of products, but may find it more expensive.
“We would advise all employers to take into account the impact of the change to the average retirement age and review their benefit packages accordingly. By speaking to an advisor to ensure they are getting the most for their money, they won’t be faced with an unexpected bill!”