One in five older workers have been forced to delay their retirement because of the Covid pandemic, research has found.
A poll of 2,000 UK-based employees by Close Brothers found 19 per cent of those aged between 65 and 74, and 14 per cent of those aged 55 to 64, said they would have to delay their retirement because of the outbreak.
Similarly, a fifth of employees (20 per cent) over 65 said they didn’t have an accessible savings fund for emergencies, while the same percentage said they weren’t financially prepared for the pandemic.
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Charles Cotton, senior performance and reward adviser at the CIPD, said the research highlighted the importance of giving people access to financial guidance throughout their working lives to help them make informed choices and be better prepared for retirement.
“Our own research shows that only half of employers have a financial wellbeing policy in place; senior management don’t view it as a priority or don't have the time, money or expertise to set one up,” he said.
"It's also really important that the government ensures people have access to lifelong learning, so they can reskill if they need or want to, and can carry on working for as long as they wish."
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Alistair McQueen, head of savings and retirement at Aviva, said while a lot of the focus has been on the pandemic’s impact on younger workers, older workers had also been affected.
“It is true that [younger workers] have been hit hard by rising unemployment, but it would be wrong to conclude that older workers have been left unscathed,” he said. “While younger workers may be moving from employment to unemployment, older workers may have seen their retirement plans thrown into chaos.
“Some may have been forced to delay their retirement plans because of loss of income and falling investment markets. Others may have chosen to exit the labour market earlier than they intended, driven by lack of opportunity.”
McQueen added that while the over-50s were the fastest growing age group in the labour market before the pandemic, this growth has now stalled. “Aviva estimates that there are now 300,000 fewer over-50s working today than projected before the pandemic,” he said. “When we lose youth and experience from the jobs market, we all lose.”
Helen Morrissey, pension specialist at Royal London, said investment volatility at the start of the pandemic had affected many people’s pension values. While the markets were now recovering, those close to retirement might still have to delay their retirement to make up any lost ground.
“In addition, we have also seen many employees furloughed, which will have eaten into the money contributed into their pensions as well as the money they set aside for emergencies,” she said.
“It is positive that those who are willing and able to continue to work can do so and it is important that HR departments engage with employees about their pensions where possible.”
Jeanette Makings, head of financial education at Close Brothers, said employers were among those “best able” to help employees improve their financial health. “They are trusted, they can reach large numbers of people via the workplace, they already offer rewards and benefits that can be used to improve financial wellbeing, and both employee and business performance will benefit from improved financial health,” she said.
“Understanding employees’ financial health as a whole, and knowing those who need most help, has to be the starting point to ensure that an inclusive, effective and targeted financial wellbeing programme is implemented. A single-channel, ‘one size fits all’ financial wellbeing approach is likely to fail many.”