An increasingly growing trend in Britain
Recent studies indicate that approximately half (49%) of non-retired Britons plan to extend their working lives beyond the age at which they’ll receive their State Pension[1], equivalent to approximately 19.2 million individuals[2].
Those contemplating working post-State Pension age anticipate doing so until they’re 72 on average, a rise from the projected 70 years in 2022[3] when similar research was last undertaken.
Motivations behind the decision
Financial stability is the primary motivation for many to continue working past the State Pension age. More than a third (36%) feel their pension won’t cover their daily expenses; worryingly, over half (52%) of this group are aged 55 or above. Almost a third (30%) express concern about the ongoing cost of living crisis, while 29% are uncertain about the longevity of their savings.
Nevertheless, there are non-financial reasons as well. A considerable 23% of respondents appreciate the routine work provided. Additionally, 20% genuinely enjoy their job, and 18% admit they’re unprepared for retirement.
Aftermath of the decision
For those considering extending their working life, 51% intend to retain their current or similar roles. However, this decision does not come without concerns. About 34% fear that continuing to work will impact their ability to enjoy their later years. One-third (33%) are apprehensive about potential health deterioration due to prolonged work, and a quarter (24%) worry about missing quality time with their families.
As workplaces become more technologically advanced, 18% of those planning to work post-retirement express concerns about keeping pace with these rapid changes. However, it’s crucial to note the immense value older workers bring. Their experience, resilience and insight can greatly benefit younger colleagues and their organisations.
Role of employers
Regardless of the reasons for working beyond the State Pension age, employers have a crucial role to play. They must foster an inclusive culture that respects and understands the evolving needs of their older employees.
The rising cost of living forces many to rethink their retirement plans, leading to an increasing number contemplating work beyond their State Pension age. While this may not be a welcome prospect for those who need to work to make ends meet, the positive aspects of working should not be disregarded.
Advantages beyond retirement
Benefits and perks play a pivotal role in the decision-making process for employees when considering job opportunities. These incentives can often be the tipping point that convinces an individual to accept a job offer. A study revealed that 34% of British workers have been persuaded to take on a position due to a compelling benefits package or company policy[4].
When inquiring about the most useful provisions employers could provide for those choosing to work past their State Pension age, income protection was the clear winner, with 45% of participants highlighting its importance. This was closely followed by critical illness cover (39%) and life insurance (38%), indicating the significant value placed on financial security in potential health-related situations.
Rehabilitation services are an essential consideration
Interestingly, one quarter (24%) of participants considered access to a rehabilitation service – a service designed to facilitate a return to work following a serious illness – as the most beneficial offering. This insight emphasises the importance of supportive measures that help maintain productivity and wellbeing during challenging periods.
This highlights why it is incumbent upon employers to create a culture where their mature workforce feels enabled and comfortable to extend their working lives. Achieving this requires a thorough understanding of the unique needs of their employees, which can fluctuate based on their stage in life.
Key to employee support
Providing relevant benefits such as group life, group income protection and group critical illness cover – benefits that usually come with additional support services – is a straightforward yet effective strategy for employee support. By tailoring these benefits to meet the specific needs of older workers, employers can foster a sense of security and inclusivity.
The importance of benefits and perks for employees working beyond their State Pension age cannot be overstated. Employers can attract and retain experienced talent with the right blend of benefits, thus ensuring a diverse and resilient workforce.
Whether you’re an employee looking to safeguard your future or an employer aiming to provide the best support for your people, we’re here to help. Don’t hesitate to contact us. Together, we can find the solution that caters to your unique needs and circumstances.
Source data:
[1] Survey conducted by Opinium for Canada Life among a national representative sample of 2,000 UK adults between 10 – 14 November 2023.
[2] Questions asked to a subset of UK adults under age 66 who have not yet retired.
[3] Survey conducted by Opinium among a national representative sample of 2,000 UK adults between 21 – 25 October 2022.
[4] Survey conducted by Opinium among a national representative sample of 2,000 UK adults between 11 – 15 August 2023
THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.
A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).
THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.