A significant proportion of older workers have been forced to delay their retirement due to COVID-19 and a lack of financial preparedness.
According to a new report by Close Brothers, just under one-fifth of workers aged between 65-74 and one in seven (14 per cent) aged between 55-64 have delayed their retirement plans in light of the pandemic.
These figures were attributed to a lack of financial preparedness, with a fifth of workers who are approaching retirement age admitting to not having an accessible savings fund for an occasion such as this.
It was workers in the 55-64 age group which were most likely to express the fact that they were financially unprepared (16 per cent). In contrast, only 5 per cent of employees aged 65-74 shared this sentiment.
However, young workers aged between 18-34 were the least prepared overall among the groups surveyed with a quarter (24 per cent) confessing that they were not financially ready for COVID-19.
As such, many employees have taken steps to fix this with three-quarters of employees (73 per cent) within the youngest age bracket saying they have made a change or plan to make a change to their financial preparedness. This was similarly reported by two in five (38 per cent) workers aged between 65-74 and almost half of workers (43 per cent) aged 55-64.
In light of this, confidence amongst employees regarding financial wellbeing is slowly increasing. A third of UK workers are more confident about weathering a fresh financial storm compared to before the pandemic (30 per cent).
Jeanette Makings, Head of Financial Education at Close Brothers commented:
The COVID-19 pandemic risks being a ‘sliding doors’ moment for UK employees and their employers. It has impacted financial health in a multitude of ways, with some suffering hardship, some having to postpone long held plans and others benefitting and adding to savings.
At the forefront of those best able to help employees improve their financial health are their employers; they are trusted, they can reach large numbers of people via the workplace, they already offer rewards and benefits that can be used to improve financial wellbeing and both employee and business performance will benefit from improved financial health.
Understanding employees financial health as a whole, and knowing those that need most help, has to be the starting point to ensure that an inclusive, effective, and targeted financial wellbeing programme is implemented. A single channel, ‘one size fits all’ financial wellbeing approach is likely to fail many.
This has also been championed by the CIPD who, in their own research, found that half of employers do not have a financial wellbeing policy. The body outlined that a financial wellbeing policy should contain signposting to financial wellbeing advice, targeted financial education and revising benefits packages to include finance-friendly initiatives.
*Data was obtained from Close Brothers’ report ‘Expecting the unexpected’. This is based on a survey carried out on behalf of Close Brothers by Opinium. The sample was 2,000 UK based employees working for companies with 200 or more workers. The research was carried out between 22nd and 28th January 2021.
Monica Sharma is an English Literature graduate from the University of Warwick. As Editor for HRreview, her particular interests in HR include issues concerning diversity, employment law and wellbeing in the workplace. Alongside this, she has written for student publications in both England and Canada. Monica has also presented her academic work concerning the relationship between legal systems, sexual harassment and racism at a university conference at the University of Western Ontario, Canada.
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