With Jeremy Hunt telling retirees and older workers that “Britain needs you”, it’s clear the Government will try to coerce more people to return to or remain in work until later in life.
However, new research – a survey of 2,000 UK adults – shows that many over-55s are braced to work into their 70s, not out of a sense of duty, but because the cost-of-living crisis, coupled with a lack of financial planning, has left them unable to retire.
Over a third (37%) say the current economic climate has derailed their financial plans. In comparison, 44% believe the cost-of-living crisis has made retirement impossible, reveals a study by My Pension Expert. Just 35% of over-55s think they will be able to retire when they want to due to a lack of proper financial planning.
Many over-55s are not sufficiently prepared to stop working. Less than half (43%) know how much they have saved in their pensions, and even fewer (37%) have a financial plan in place for retirement.
While 32% of those over-55 have spoken to an independent financial advisor (IFA) before, only 17% currently use the services of a financial adviser. Most (55%) think financial advice is too expensive.
Andrew Megson, CEO of My Pension Expert, said: “Chancellor Jeremy Hunt has been making it abundantly clear that he wants to keep over-55s “economically active”. “Britain needs you”, he said, despite the fact that older workers have been poorly treated and under-acknowledged for many years. No, it won’t be a sense of duty that keeps them in employment, but a necessity, as our research proves.
“The cost-of-living crisis is squeezing people’s finances and derailing their long-term plans. Many believe decisions around retirement are now out of their hands. Worryingly, though, not nearly enough is being done to boost pension engagement or access to independent advice, which would give Britons the tools to effectively plan for a secure, stable, financially viable retirement.”
So how can employers help with financial planning?
There is a lot employers can do to engage and retain older workers in the workplace.
Start by offering flexible work arrangements, such as flexible hours, part-time or job-sharing options, and telecommuting options. Employers can also provide skills development and career advancement opportunities, wellness programmes and health benefits.
Employers can also create a positive and inclusive work environment, recognising the valuable contributions that older workers bring to the workplace. Offering phased retirement options, such as reducing hours gradually, can also make the workplace more attractive to older workers who want to continue working but also want to transition into retirement.
Employers can help older workers with financial planning in several ways:
- Financial planning resources: Provide access to on-site seminars, online tools, and financial planning software.
- Retirement benefits: Provide support on creating a pension plan or other savings plans to help employees save for their future.
- Financial education: Employers can offer financial education programs to help employees understand the importance of financial planning and how to plan for retirement.
- Phased retirement options: Employers can offer phased retirement options that allow employees to gradually reduce their hours or workload over time, helping them transition into retirement.
- Employee Assistance Programs (EAPs): Encourage using Employee Assistance Programs (EAPs), which often provide financial planning resources and support.
Employers play an important role in helping employees prepare for retirement and manage their finances. By offering these resources, employers can help reduce financial stress for older workers and ensure a secure and comfortable retirement.