More than a quarter of people (27 per cent) think they will still be in full or part-time employment when they are 70, according to research released today.
Almost half (46 per cent) of the 700 consumers aged 18 to 64, who were quizzed by insurer Aegon about what factors may influence their future financial wellbeing, believed they would be healthy enough to continue working at 70. The majority (74 per cent) also said they felt confident that they would be financially stable in their eighth decade.
Steve Cameron, pensions director at Aegon, said retirement age was no longer solely dictated by the size of an employee’s pension pot. “For some, working beyond the past ‘traditional’ retirement age will be a lifestyle choice but, for others who put off planning ahead, it could be a financial necessity to cover living costs,” he added.
Steve Webb, director of policy at Royal London and former pensions minister, warned People Management of a “sharp divide” between those who continue working because they want to and those who cannot afford to retire.
“Many people value the opportunity to stay in work because of the social side and the intellectual stimulation, not necessarily because of the money,” Webb said. “For others, working on may be a necessity, especially for those who never had access to a final salary pension and have been slow to build up their own pension pot. Firms will need to engage more actively with older workers to make sure they are able to make choices that work for them and for the employer.”
But Nathan Long, senior pension analyst at Hargreaves Lansdown, told People Management that he expected the number of people who thought they would be working at 70 to be higher.
“The ONS [Office for National Statistics] has shown a big jump in the number of people who are working past retirement age in the last couple of years, and our research shows that we are starting to see that happen,” he said. “A third of our clients have said that they ruled out not doing any part-time work in the future. This means that two-thirds think they might have to work part time.”
Aegon’s survey also revealed that around a quarter of women (25 per cent) and 28 per cent of men thought they were likely to continue working past 70.
However, a recent report from Close Brothers found that more than half (51 per cent) of female employees felt financially unprepared for retirement, compared with a third (35 per cent) of men.
The average amount in a woman’s workplace pension scheme (£53,000) was less than half of their male counterparts (£120,000), according to the firm’s Lifetime Savings Challenge report, which collected responses from more than 3,000 companies.
Jeanette Makings, head of financial education services at Close Brothers, said employers were “perfectly placed to play a central role” in closing the gender savings gap.
“By offering financial education in the workplace, and by tailoring that education according to their employees’ needs, employers can boost saving confidence and help employees develop long-term saving habits,” she said. “There is no quick or easy fix to the gender savings gap, but companies need to do what they can to ensure that employees, regardless of gender, are well prepared for their financial future.”
Meanwhile, research released last week by independent financial advisers Chase de Vere revealed that 42 per cent of employers believed their employees should take responsibility for their own financial education.
The two major reasons given by the 300 randomly selected UK employers surveyed was the cost of providing this as a benefit and an apparent lack of appetite from staff for such a service.
Sean McSweeney, Chase de Vere’s corporate advice manager, said the findings were “disappointing”, but the message from employers seemed “loud and clear – employees cannot rely on anybody else to look after their financial futures”.