Employees still aren’t planning for the future and are confused by what constitutes ‘the right age’ to think about retirement, according to a new report out today.
New research by the Institute for Employment Studies, ‘Should I Stay, Or Should I Go?’, explores the diverse ways in which older employees plan their future working life and retirement as well as what support their employer provides. The report also presents solutions to what can be an awkward and difficult dialogue about later-life planning, between employers and employees.
While some respondents had a clear plan mapped out for the future of their working life and beyond, others, particularly those in their early 50s, seem to have done little in the way of forward planning. When considering retirement, two perspectives frame employees’ thinking. First, the kind of people they are in terms of age, health and family interests; and second, their particular financial and work situation. These variations are likely to influence the planning process, and are key to people deciding that they ought to plan in the first place. Some interviewees felt somewhat anxious about the link between their retirement and physical and mental ageing.
The study found that recession has altered the retirement landscape significantly as redundancies and recruitment freezes have led to higher levels of unemployment among the older workers. The individual may no longer be in the driving seat of his or her later life and retirement planning. Not only might older workers potentially be an easy target for companies looking to cut costs, but those losing their jobs cannot afford to take the early retirement as they might have done in financially healthier times. This has been the first recession in which employees have been able to raise claims of unlawful age discrimination.
Marie Strebler, Associate Fellow at the Institute for Employment Studies and one of the report’s authors, comments:
“Employers seem to be stuck in reactive mode. They provide retirement support, however they are failing to encourage people to stay, treating requests on a case-by-case basis and thus missing opportunities to retain much needed and valuable skills. Older workers are an asset, but a tremendous shift in deep-seated stereotypical attitudes to ageing and work is required if employers want to foster a culture where early retirement and prolonged working lives co-exist. This can only be achieved with an open and continuous dialogue between line managers and individuals and through support by HR policies and practices.”
“Negative attitudes and stereotypes in the workplace have not necessarily disappeared with the advent of age discrimination laws. In tougher times there is a risk that cuts will have an adverse and disproportionate impact on older workers. Ageist stereotyping is potentially the most common form of prejudice experienced by individuals, given that ‘old age’ comes eventually to every living person. The prevalence of self-stereotyping among older interviewees was particularly striking. We encountered many examples of this, where the sense of being a cultural misfit was evident in the shape of denial, intergenerational comparison and self-doubt.”
Other key findings
Some older employees are comfortable dealing with the uncertainty and complexity inherent in the later life planning, but a greater number are rather ambivalent about whether to plan in the first place and unsure about the process.
There is a general lack of conversation about later life planning. There is an overwhelming feeling that these conversations can be awkward and sometimes difficult. Older employees wished they had discussed later life planning throughout their career on an informal and non-binding basis.
Line managers play a key role in supporting older employees’ planning, but they are enabled or constrained by business needs. Some interviewees conveyed a sense of feeling sidelined, watching their employer’s effort to bring in younger employees.
Interviewees expressed confusion and frustration at the complexities of the pensions system. With the financial markets ever more volatile, older employees appeared to have lost something of their sense of control over their financial position.
Older employees wished for a recognised forum to share their experiences, someone to have informal chats with and a chance to have a proper voice in order to eradicate the stigma of retirement.
Researchers encountered relatively few examples of older employees asking for their options to stay on – this might be due to employers’ dilemma in whether to encourage people to stay.
Flexible ways of staying on, presented transparently as viable options, can help maintain engagement and a sense of security, as well as retain important skills and experience.