This is the first year the number of people planning to work beyond state pension age has fallen since Canada Life’s research began in 20154. With health issues brought on by the virus and an increase in unemployment and redundancy, COVID-19 is seemingly accelerating retirement plans and potentially encouraging more people to stop working when they hit 66.
Paul Avis, Canada Life Strategic Propositions Director, Group Insurance said: “For some older workers, the events of 2020 have helped them realise they want to spend more time at home, with their families and learning new skills and hobbies. Whereas for others, poor health and vulnerability may - sadly - have accelerated their retirement plans. While unemployment continues to rise, job losses may be another contributing factor to this drop in the number of people planning on working beyond retirement age, especially for those receiving or expecting redundancy payments. However, the shape of retirement is changing and so are the wants and needs of those approaching the next phase of their lives. We are witnessing a huge shift in the retirement time horizon as society changes and adapts to a new norm, and these changes are only accelerating due to the pandemic.”
For the 19.8 million who do plan on working into their late 60s, 16% don’t expect to retire until after they’ve turned 75. There are various motivations for working beyond state pension age, including both social and financial; 42% say their pension pot is not big enough to fund life after work yet so they need to continue earning, while a fifth (22%) will carry on working because they enjoy the routine. A fifth (21%) say they feel unprepared for retirement and, encouragingly, 20% simply enjoy their day-to-day job.
Older workers’ concerns
Of the millions of older workers who will be working beyond their 66th birthday, 37% are worried that their health will inhibit their ability to work, and a quarter (24%) are concerned that they will be treated differently because their boss or colleagues perceive them as ‘old’. Nearly a third (30%) also worry that continuing to work will make their health deteriorate, and 31% are concerned that working later will mean they can’t enjoy their old age. To alleviate these concerns and support employees working into older ages, 32% want their employer to offer income protection, and another 32% want critical illness cover available through the workplace.
Paul Avis, continued: “Older workers sit at the heart of our economy and they are an invaluable resource for thousands of employers with the kind of experience and expertise that only comes with time. While on one hand, we can take the positive from 2020 that it has helped some older workers realise there is more to life than just work and reset their priorities, many organisations will feel the impact of experienced employees leaving the workforce.
Employers have a significant opportunity to support employees’ health and wellbeing and so, for employers that are seeking to increase workforce productivity and engagement, group risk and other health related benefits will increase in importance. For organisations that are concerned about staff attraction and retention they should consider protection products and benefits that have a wide range of support services - as well as financial benefits that provide peace of mind - including employee assistance programmes, counselling and burnout support and virtual GP services.”
Canada Life is continuing to explore the new journeys to retirement, looking at how experiences of retirement are fragmenting as a result of changes in how we spend our time, accumulate and spend wealth, the rise in individualism and the declining relevance of social norms.
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