Older workers plan to work past retirement age
9:59am Monday 30th November 2009 in Job News
The proportion of older workers planning to work beyond the state pension age has increased dramatically in the last two years, suggesting that the recession has shrunk pension pots, savings, investments and house values.
This is the main finding from a survey by the Chartered Institute of Personnel and Development.
The Employee Outlook survey of 2,000 working people shows the proportion of people aged 55 and above planning to work beyond the state pension age has jumped to 71 per cent, compared to 40 per cent in a CIPD survey two years ago.
Financial factors are the main reason employees of all ages plan to work longer, with 71 per cent of those aged 55 and over saying this is the case.
The research also shows that the older people get, the more likely they are to be planning to work beyond state retirement age, suggesting that reality bites as they get closer to drawing their pension.
Just 30 per cent of people aged between 18 to 24 plan to work beyond the state retirement age, however 52 per cent of this age group said they did not know and 18 per cent said no.
Charles Cotton, Reward Adviser, CIPD, said: “Employers need to review how they are helping their employees save for retirement to get value from their pension spend from 2012 onwards.
“With more people planning to work past 65, employers will have to accommodate older workers and motivate those who wish they could be elsewhere.”
The survey also shows:
- Under half of employees (46 per cent) said they had a pension with their current employer, with men (52 per cent) more likely than women (39 per cent) to say this is the case
- Worryingly just 23 per cent of people aged 18 to 24 have a pension with their current employer
- There is a stark split between those working in the public, non profit and private sectors. A total of 90 per cent of public sector workers have a pension with their current employer, compared to 53 per cent of workers in the non-profit sector and just 36 per cent in the private sector.
Mr Cotton said: “That so few private sector employees are saving for retirement through the workplace is a ticking time bomb for the UK economy and society.
“While auto-enrolment in 2012 is an important step in defusing this, more has to be done to get the message out to individuals that saving for retirement is essential, especially as the state pay-as you-go pension becomes increasingly unsustainable in its current format.”