More than three in five (61%) UK employees believe that they will have to work beyond the age of 65 and one in five (22%) say there is no question that they will continue to work as they get older, according to research by Canada Life Group Insurance.
The survey showed that the reason is primarily financial, with a third (32%) reporting that their pension savings will not be enough to fund their retirement, 14 percent concerned that their money will run out and a further 14 percent stating that they don’t believe they can rely on the state pension.
Paul Avis, Marketing Director of Canada Life Group, said:
“Retiring at the age of 65 is no longer a given, with a majority of employees expecting to work beyond this point be it for financial reasons or enjoyment.
“The recent recession has no doubt taken a toll as employees accept that their current savings and pensions are unlikely to cover the cost of retirement but improvements in health also mean that people are able to work longer.“
Almost half (47%) of employees blame the financial crisis for their inability to retire at the standard age of 65 but the new pension rules coming into force this April also appear to have had an effect.
The new legislation, which says that retirees will be able to access their pension pot in full has brought planning for retirement further into the spotlight than it has previously been, but just 6 percent of respondents have reviewed their retirement savings and see this as a benefit that means they will not have to work as long as they first thought.
In contrast, one in five (19%) respondents have reviewed their finances since the pension changes were announced and found they will have to work longer, rising to over a quarter (26%) in London.
It is imperative that employers adapt accordingly to offer appropriate benefits and flexibilities to support their entire workforce. Especially in light of the fact that an ageing workforce is likely to suffer from a greater number of health issues.
“Critical illness cover or income protection can offer invaluable support in the event of an accident or illness and is something greater numbers of employees and employers need to be aware of.”
Just 12 percent say that they would not work past the age of 65 under any circumstances, demonstrating that an ageing workforce is fast becoming the norm.
Younger respondents, who have been impacted by the rising state pension age, are most likely to believe that they will work past 65. 69 percent 21-30-year-olds believe they will work after 65 compared to just 50 percent of those aged 50-60.
“The younger generation have been particularly hard hit by the recession and, wise to the fact that they will enjoy a less generous pension scheme and have a longer life expectancy than their parents or grandparents, are therefore realistic to the fact they will be working beyond the age of 65.”
Table 1: Factors that make people work past the age of 65
|My pension will not be sufficient so I need to continue earning a wage||32%|
|I enjoy my job and would like to work for as long as possible||20%|
|I have not prepared for retirement/am not sure how long my money will last||14%|
|I can no longer rely on a state pension/state benefits||14%|
|I have saved for my retirement but the cost of living is so high I will still need a wage||13%|
|I am worried about the cost of long-term care so would like to earn for as long as possible||10%|
|I have children to support at home/through university||5%|
|To continue receiving valuable employee benefits||4%|
N.B percentages will not add up to 100 as respondents could tick more than one option