6 million UK employees could be working into their eighties says new report
20 per cent of the UK population believe they will never be able to retire due to poor financial planning for retirement; that’s over 6 million people today who could be working beyond retirement age into their eighties predicts a new report[i].
The ‘Working Late’ report[ii] from Wealth Wizards consulted with 1,000 people with ages ranging from 18 to over 65. 86 per cent stated that they wanted to retire at or before 65, but only 37 per cent believe this is financially feasible.
The Wealth Wizards report identified pension under-savings as a key driver of this retirement gap, and one of the main causes that will lead to an ageing workforce potentially into their eighties. 56 per cent of respondents wish they had added more to their pension when they were younger. Interestingly, 45 per cent of the 18-34 age group is already concerned about their lack of pension savings despite retirement age being some decades away.
While employees want to leave work and enjoy their retirement, conversely almost half of employers (45 per cent) said that they would embrace their employees working into their eighties. This is despite associated drawbacks such as higher costs due to employee benefits, fewer opportunities for younger workers, and potentially reduced productivity due to an increase in sick days that could lead to 1.7 million days of lost work per year.[iii]
The ‘Working Late’ report also showed that 49 per cent of employees over 55 believe that their employers should be doing more to guarantee their financial stability in retirement. This rises to 59 per cent amongst those aged between 18 and 34 demonstrating that there is a strong appetite amongst this group for employer assistance in planning for their older age.
Phil Blows from Wealth Wizards said:
“The reality is that two thirds of the working population will be unable to retire at 65 due to insufficient pension savings. The UK is already faced with an ageing workforce where workers aged over 64 have doubled in the past twenty years[iv]. It is important that employers and the government work together to ensure employees are provided with cost-effective and accessible advice and support to help them plan for their retirement. The good news is that it’s not too late for people to benefit from professional expert advice in order to alleviate their stress and concerns around their financial future. The key for employees is to act now and explore potential advice solutions with employers.”
Currently only 24 per cent of employees are offered financial education by UK employers. The UK should be the trailblazers in Europe with at least 80 per cent of employers offering financial advice as part of an employer’s everyday commitment to their staff. Once considered the domain of the High Net Worth Individual, quality, highly regulated and professional financial advice is now available to employees across the UK courtesy of online financial advisers that utilise the latest in digital technologies to deliver regulated, professional quality advice.
Phil Blows from Wealth Wizards continued:
“We’re committed to improving the financial wellbeing of the nation’s workforce. It is our collective responsibility to ensure that as many of the 86 per cent who want to retire at or before 65 are given this chance. Where companies have offered financial advice, there have been positive results such as Intercontinental Hotels Group 68 per cent of employees within a target group increased their pension contribution by an average of more than 100 per cent.”
[i] Labour Force Work Survey Sept 2017 that shows 32.10 million people in work. 20 per cent of this is over 6 million people that could potentially be working in their 80s due to poor financial planning for retirement. https://goo.gl/aP8CxG
[ii] Centre for Economics and Business Research Ltd conducted the survey-based research on behalf of Wealth Wizards in October 2017 amongst 1,000 UK employees aged from 18 to over 65. Cebr is an independent economics and business research consultancy providing forecasts and advice to City institutions, government departments, local authorities and numerous blue chip companies throughout Europe.
[iii] Workers aged 64 miss 3.3. days per year more than those below 35. Labour Force Survey 2017. Across the UK, a one year delay of retirement among employees aged over 64 could lead to almost 1.7 million days of lost work per year.
[iv] the share of older workers in the total UK workforce has increased dramatically: workers aged 50-64 account for 27 per cent of the workforce compared to 19 per cent in 1992. The share of workers aged over 64 has nearly doubled to 3.7 per cent of the total UK workforce within the same time period. ONS Data.