Emma Byron, Managing Director of Legal & General Retirement Solutions: “It is positive to see the post pandemic recovery continue in the labour market, with today’s figures from the Office for National statistics revealing steady gains in job creation and falling redundancy rates. However, the figures also reveal a tight squeeze on living standards, as any pay rises are wiped out by rising inflation.
“With inflation set to rise to 6% from April, there is understandably increasing anxiety around how people should manage their money this year and protect their hard-earned savings. All this makes good work, wealth and wellbeing planning important. That is why we have created a Midlife MOT in partnership with the Open University – a free health check with to help people stay on top of their finances and manage the challenges of work.”
Kate Smith, Head of Pensions at Aegon comments: “Once again this month, labour market figures show a jump in the number of people aged 50 to 64 who are economically inactive as an increasing number of those at or approaching retirement age, largely men, are opting to step out of the workforce. The legacy effect of the pandemic is most evident in the older age bracket as many face poor health, redundancy or simply don’t want to return to the office post coronavirus. Some who have opted to halt their working life early may now find high inflation impacting how much they have to live off. In the months ahead we may start to see some individuals making a decision to return to employment, if the cost of living crisis continues.
“In contrast, today’s figures also show a surge in the number of employees on the payroll of UK firms, to a record 29.5 million, with a continued rise in the number of part-time and young workers. Many of those moving into part-time work will be taking advantage of new flexible working arrangements with some workers returning to work on reduced hours not through choice following the end of the furlough scheme. Reduced working hours can lead to greater financial challenges in both the long and short term. With the surge in part-time workers alongside an increase in the number of young people now in work, with many taking on zero-hours contracts, there is now even greater pressure for auto-enrolment thresholds to be made fit for today’s working practices and preferences. If this trend continues, many people risk missing out on valuable employer pension contribution as they don’t meet the £10,000 a year auto-enrolment earnings trigger.”
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