- Nearly three quarters (71%) of UK employees will continue working beyond their 65th birthday – up from 61% in 2015
- Among those expecting to work beyond the age of 65, seven in ten (71%) cite the rising cost of living as a reason, while two thirds (62%) cite poor returns on savings
- Nearly a third (32%) say they need to continue earning a wage because their pension savings are insufficient, rising to two in five (39%) among those approaching the traditional retirement age (45-54-year olds)
Nearly three quarters (71%) of UK employees – equivalent to 23 million people[1] – are set to work beyond their 65th birthday, according to new research from Canada Life Group Insurance. A further two in five (37%) believe they will reach their 75th birthday before they retire.
The proportion of those who intend to work beyond the age of 65 is up from 61% in 2015 (when Canada Life Group Insurance began tracking this data) and continues a long-term upwards trend as employees stay in work for longer.
Rising prices and poor returns on savings delay retirement
Among those expecting to work beyond the age of 65, seven in ten (71%) cite the rising cost of living as a reason. Food prices in particular have been rising at their fastest pace for more than five years – the result of last year’s extreme weather and an increase in global import costs[2].
Despite a fall in inflation over the past year, another two in three (63%) say that rising inflation eating into the value of their savings is an influential factor, while 62% say the same of poor returns on their savings.
Figure One: External factors which make employees more likely to work beyond 65
|
Rising cost of everyday necessities |
71% |
|
Rising inflation eating into the value of my savings |
63% |
|
Poor returns on savings |
62% |
|
Slow wage growth |
58% |
|
Economic uncertainty caused by Brexit |
51% |
Respondents could select more than one answer
Poor retirement planning plays a role, although some enjoy working longer
A third (32%) of those who intend to work beyond the age of 65 admit that they need to continue earning a wage because their pension savings are insufficient, rising to two in five (39%) among the age group approaching the traditional retirement age of 65 (45-54 year olds).
This lack of planning has been exacerbated by the recent changes to the UK state pension age, with a quarter of employees (25%) acknowledging that they can no longer rely on it and will have to work for longer to bolster their savings, up from a fifth (21%) last year.
However, not everyone views working for longer as a grim prospect: three in ten (30%) say they plan to work beyond the age of 65 because they enjoy their job, while one in five (17%) employees say they will stay in work to continue receiving valuable employee benefits.
Figure Two: Top five factors why people are planning to work beyond 65
|
My pension will not be sufficient, so I need to continue earning a wage |
32% |
|
I enjoy my job and would like to work for as long as possible |
30% |
|
I can no longer rely on a state pension/state benefits |
25% |
|
I have saved for my retirement, but the cost of living is so high I will still need a wage |
21% |
|
I get other benefits from work, for example, social interaction |
21% |
Respondents could select more than one answer
In particular, income protection (17%) and life insurance (16%) are highly valued benefits for employees who are considering working beyond the age of 65, while one in ten also appreciate the support of a critical illness cover (13%) or access to an Employee Assistance Programme (10%).
Paul Avis, Marketing Director of Canada Life Group Insurance, comments:
“It comes as little surprise that UK workers are planning to work longer as external factors like the rising cost of living and poor returns on savings exert extra pressure on employees’ finances. Indeed, for the third consecutive year, our findings suggest that over 70% of the country’s workforce is expecting to work beyond the age of 65, with well over a third not envisaging retirement before their 75th birthday.
“From an employer’s point of view, it’s interesting to note that a growing number of workers are planning to work beyond the age of 65 not for financial reasons, but because they still find their job enjoyable. Employers have a few cards up their sleeves that they can play to attract and retain older workers, who can bring valuable experience to their organisation.
“Income protection and critical illness cover should be top of the list for employers thinking about retaining an ageing workforce. They protect staff financially in the event of ill health and are increasingly popular amongst employees planning to work beyond the age of 65. These benefits can be accessed with most group insurance policies and include a wide range of support services – from early intervention to employee assistance programmes and second medical opinion services. These free support services can still be used without a claim and add invaluable support for employees of all ages.”
[1] ONS Labour market data, March 2019
[2] British Retail Consortium, Shop Price Index February 2019