Canada Life has reported that the number of workers expecting to work beyond state pension age has fallen from 71% last year to 51% in 2020.
This is the first year the number of people planning to work beyond state pension age has fallen since Canada Life’s research began in 2015.
The provider believes that health issues brought on by Covid-19 and an increase in unemployment and redundancy are accelerating retirement plans and potentially encouraging more people to stop working when they hit 66.
Paul Avis, Canada Life strategic propositions director, group insurance, said: “For some older workers, the events of 2020 have helped them realise they want to spend more time at home, with their families and learning new skills and hobbies. Whereas for others, poor health and vulnerability may – sadly – have accelerated their retirement plans.
“While unemployment continues to rise, job losses may be another contributing factor to this drop in the number of people planning on working beyond retirement age, especially for those receiving or expecting redundancy payments. However, the shape of retirement is changing and so are the wants and needs of those approaching the next phase of their lives. We are witnessing a huge shift in the retirement time horizon as society changes and adapts to a new norm, and these changes are only accelerating due to the pandemic.”
For the 19.8 million who do plan on working into their late 60s, 16% don’t expect to retire until after they’ve turned 75. There are various motivations for working beyond state pension age, including both social and financial; 42% say their pension pot is not big enough to fund life after work yet so they need to continue earning, while 22% will carry on working because they enjoy the routine. 21% say they feel unprepared for retirement and, encouragingly, 20% simply enjoy their day-to-day job.
Of the millions of older workers who will be working beyond their 66th birthday, 37% are worried that their health will inhibit their ability to work, and 24% are concerned that they will be treated differently because their boss or colleagues perceive them as ‘old’. 30% also worry that continuing to work will make their health deteriorate, and 31% are concerned that working later will mean they can’t enjoy their old age. To alleviate these concerns and support employees working into older ages, 32% want their employer to offer income protection, and another 32% want critical illness cover available through the workplace.
Avis added: “Older workers sit at the heart of our economy and they are an invaluable resource for thousands of employers with the kind of experience and expertise that only comes with time. While on one hand, we can take the positive from 2020 that it has helped some older workers realise there is more to life than just work and reset their priorities, many organisations will feel the impact of experienced employees leaving the workforce.
“Employers have a significant opportunity to support employees’ health and wellbeing and so, for employers that are seeking to increase workforce productivity and engagement, group risk and other health related benefits will increase in importance. For organisations that are concerned about staff attraction and retention they should consider protection products and benefits that have a wide range of support services – as well as financial benefits that provide peace of mind – including fitness and nutritional programmes, counselling and burnout support and virtual GP services.”