Research presented by Canada Life Group Insurance shows that approximately one in four (7.2 million) United Kingdom workers say they expect to work past the age of 65 due to low interest rates.
Since the 0.5% Bank of England interest rate was introduced seven years ago, over 20% of UK employees say they have seen their retirement plans negatively affected. This figure includes a group of workers who had no intention of working past the age of 65, but now feel as though they don’t have any other option.
Human resource experts cite the rising State Pensions Age and the abolition of the default retirement age as driving the increase of UK employees who will work beyond the traditional retirement age.
These HR experts explain that younger generations will really feel the changes. Eighty-five percent of people between the ages of 21 and 30 believe they’ll have to work well beyond the age of 65.
Of course when asked why they will choose to work past the age of 65, most people cited financial pressures. Over 40% of those researched claimed their pension pot simply just wasn’t sufficient enough to enter into retirement. Surprisingly, though, another reason was just mere enjoyment of the job. Almost 40% said they didn’t want to leave their job because they would miss it in retirement.
Reforms announced a few years ago put retirement planning on the radar for many people who just weren’t thinking about it. Since reviewing their savings after the freedoms were announced, many employees realized they will have to work for a longer period than initially expected.
Additionally, multiple years of having poor interest rates seems to be having a lasting impact on today’s generation who are struggling with insufficient pension contributions.
With all of this said, employers are being urged to take into consideration this older employee set. They will soon be faced with a larger number of health issues that will have to be factored in and older workers are more likely to experience injury and illness. Flexible working and workplace wellbeing initiatives will start to prove invaluable.
