Older workers (55s+) in the UK are bracing themselves to continue working until they are 70 years old, according to new research by the CIPD, the professional body for HR and people development.
In a survey of more than 1,600 UK employees, more than a third (37 per cent) of all workers believe they will have to work past the widely accepted retirement age of 65, a figure which jumps to 49 per cent among workers over 55s. Among those who predict they will work past 65, the average age they expect to actually retire is 70.
The most common reasons for employees wanting to work past 65 are that many people believe it will keep them mentally fit (32 per cent), followed by a desire to be able to earn enough money to continue to enjoy themselves, for example by going on holidays (27 per cent).
Older workers need more support
However, the research has also finds that many employers aren’t doing enough to support older workers in the workplace. Just one in four (25 per cent) employees believe that their employer is prepared to meet the needs of workers aged 65 and over, demonstrating how much work organisations need to do in order to prepare for the increased numbers of older workers in the workplace.
Charles Cotton, pay and reward adviser at the CIPD says, ‘It’s shocking that, despite a large proportion of UK workers planning to work past the age of 65, employers are so underprepared to meet the needs of a maturing workforce. Older workers offer vast experience and knowledge, and can also act as mentors to young people in the workplace.
‘To reap those opportunities, employers need to start reviewing and adapting their people practices as well as the design of the organisation, jobs and work to ensure that they are fit for the new purpose.’
Cotton adds, ‘Previous CIPD research has shown that multi-generational workforces are of huge benefit to organisations. It is very positive to see that employees are also recognising that remaining at work can help their well-being by helping them to keep mentally fit. In return, organisations have a duty to build workplaces that enable talented older workers to continue to work without facing organisational barriers.’
Pension age to increase
The research also finds a lack of awareness among some employees regarding the new state pension age. For instance, 26 per cent of 55s and over claim that they do not know that the state pension age will increase from 65 to 66 between 2018 and 2020.
Similarly, 48 per cent of 35–54-year-olds are still unaware that the state pension age is going to increase from 66 to 67 between 2026 and 2028.
There’s also a significant proportion of employees who are unaware that they need to have paid National Insurance contributions for ten years to get the minimum state pension (36 per cent) and that they must have paid National Insurance contributions for 35 years to get the full state pension (32 per cent).
Charles Cotton says, ‘It’s clear that many people aren’t fully aware of what kind of pension they might receive or when, especially if the state pension is going to form a significant part of their retirement income. If they find out too late what they are entitled to, then they may be forced to remain at work out of necessity rather than choice.
‘Employers will need to look at how to meet the needs of this group and HR has an important role in communicating to employees about changes to the state pension. It is only fair that the state plays its part as well in telling workers what they can reasonably expect to receive.’
Other key highlights from the report, which covered perspectives on both pay and pensions, include:
One in four (23 per cent) workers have experienced a decline in their living standards in the past 12 months, with a similar number (24 per cent) believing they will see a further decline in 2017. This is likely to be due to the expectation that inflation will continue to rise, possibly outstripping pay rises by the end of the year.
Just 55 per cent of all employees believe they will get a pay rise in the next twelve months, down from 66 per cent this time last year.
A third (31 per cent) of workers don’t expect any salary growth in 2017. Workers in Wales are particularly pessimistic about their pay, with 43 per cent believing they will not see salary growth in 2017.