Two and a half million pre-retirees will have to delay retirement because of the economic downturn, a study has found.
The data from Legal & General found that among those planning to delay leaving work, 1.7 million expected to have to keep working indefinitely, either in part-time (19 per cent) or full-time roles (9 per cent).
Pre-retirees who planned to delay their retirement said they would need to push it back by almost three years on average, with nearly two thirds (64 per cent) unable to afford the loss of income while costs were so high.
The Opinium Research of 2,003 UK adults aged 55 and over found other reasons for delaying retirement included people simply enjoying their jobs (26 per cent) and not feeling ‘old enough’ to retire yet (25 per cent).
Stuart Lewis, chief executive of Rest Less, said the cost of living would be just one of many reasons, and that while the situation was “hugely challenging” it could benefit employers facing a tight labour market. “There are huge commercial benefits from running a multigenerational workforce,” said Lewis. “Mid-lifers present an untapped reservoir of skills and talent and typically stay in a role for significantly longer than their younger counterparts.”
He added that the sooner employers “stop their bias” against older workers the greater the value will be on their bottom line.
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Meanwhile, recent figures from the Office for National Statistics (ONS) found among those aged 50-64 there was a drop of 84,000 classing themselves as economically inactive – defined as those unable to or deciding not to work. There was also a decrease in people citing retirement as a reason for inactivity, with 49,000 fewer saying this over the latest quarter.
Alice Dawson, researcher at Demos, said that ill health can be a significant barrier to older people's ability to continue working into their 50s and 60s, and that if more people were delaying retirement, employers must take active steps to support the physical and mental health of their older workers.
Dawson added that while businesses are eager to retain and support older workers, retention strategies shouldn’t rely on those who have no choice. “It’s important that older workers who wish to retire feel able to do so,” she said. “Retention strategies should focus on employees who want to stay in the workforce but need support or flexibility with health, caring responsibilities or other issues; employers should not rely on people feeling forced to stay in work because of severe financial struggles."
Amy Butterworth, head of consultancy at Timewise, said the economy was exacerbating an “existing trend” of people needing – and in some cases wanting – to work longer.
However, Steve Butler, chief executive at Punter Southall Aspire, said that if organisations don’t offer flexibility to older workers, who often particularly value flexible working, they will find another employer that does. “Lots of employers can say they support older workers but a business only supports them if it has a culture that supports their changing lifestyle requirements,” he said.