It has been revealed that that two in five professionals over 55’s have seen significant and often unwanted and unplanned, changes to their careers in the ten years between their 55th and 65th birthdays, says a recent report by Aviva which monitors the finances of the UK’s over-55s. Indeed, one in seven (15%) report being made redundant, 11% were forced to stop work due to illness and 11% were forced into early retirement.
Looking at the impact of these unplanned changes, 68% said it has had a detrimental effect on their retirement finances, with 34% having to cut back on their lifestyle, 7% worrying about how to pay an outstanding mortgage and 11% considering using assets such as their house to pay for retirement.
On top of this the Report found that the vast majority (74%) of over-55s said it is harder to find work after their 55th birthday and 35% said that they believed that employers valued youth and speed over experience.
Almost half (47%) of those who were made redundant felt this happened as their company was making cuts and they were simply included in those at risk and 31% chose to take redundancy as they were offered a good package. However, a shocking 8% said they believed their company chose to replace them with someone that they could pay less. Possibly as a result over-55s believe smaller employers (24%) are better than larger employers (9%) to work for when they are older.
Clive Bolton, ‘at retirement’ director at Aviva said:
“Many people see the final ten years before they retire as an opportunity to build up their pension pot. However, this report clearly shows that almost 40% of over-55s experience a significant career disruption over this period – sometimes bringing a premature end to their working lives.
“With over two-thirds (68%) saying that this change to their working status had a detrimental impact on their finances, 34% believing that they would have to cutback on their life-style and 7% concerned about how they would pay off their mortgage – this is a serious issue.
“With the changes to the default retirement age, people will have more choice as to how and when they finish their working lives. However, they do need to remember that some factors remain out of their hands so it is important to financially prepare for all eventualities.
“Overall, this report highlights the importance of preparing for retirement over an entire working life – rather than hoping to boost an inadequate pension pot in the count down to the end of your career.”