What retirement? Older workers plan to work for longer.
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 (CIPD).
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 percent, compared to 40 percent in a CIPD survey two years ago. Financial factors are the main reason employees of all ages plan to work longer, with 71 percent 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 percent of people aged between 18 to 24 plan to work beyond the state retirement age, however 52 percent of this age group said they did not know and 18 percent said no.
Charles Cotton from the 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 stated that under half of employees said they had a pension with their current employer, and worryingly just 23 percent of people aged 18 to 24 have a pension with their current employer. There is also a stark split between those working in the public, non profit and private sectors. 90 percent of public sector workers have a pension with their current employer, compared to 53 percent of workers in the non-profit sector and just 36 percent in the private sector
CIPD’s Mr Cotton continued, "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.”