Rising numbers of employees working past traditional retirement ages is a potential threat to recruitment and retention, new research* from employee benefits consultancy Portus shows.
Its study among HR executives found 41% believe companies face looming problems in retaining and recruiting new staff if existing employees are unwilling to or unable to afford to retire.
Employment data** shows 1.19 million over-65s are still working – slightly down on the 1.202 million peak at the start of 2015 – but still nearly double the 635,000 over-65s in the workforce in 2006.
Working past 65 is increasingly seen as an option by employees, Portus’s research*** indicates. Its nationwide study found just 29% of employees have ruled out working past 65. Younger workers – who face higher State Pension Ages – are the most likely to work past 65 with just 23% of those aged 25 to 34 saying they will definitely stop work by 65.
Portus, which provides the moneygym guidance service for employees through employee benefits, believes that improved retirement planning will benefit both employers and employees.
Portus Consulting Commercial Director Steve Watson says:
“Working past 65 is becoming increasingly normal with more than 1.1 million over-65s in employment.
“But if people are staying in work simply because they cannot afford to retire then it becomes a possible flashpoint for employers and a potential issue in managing their business for the benefit of all employees.
“New pension freedoms have meant increased flexibility over pension funds and increasingly put the responsibility for retirement planning on employees. People however need support in managing their retirement plans and employers have a role to play in delivering guidance.”
Portus’s research shows 79% of employees would welcome online guidance through their employer which enables them to keep track of their retirement planning and to have all relevant information in one place. Those aged 35 to 44-years old are particularly supportive – 84% said they would use an online service.
Portus’s financial planning portal moneygym – which is accessible at work and at home around the clock – provides guidance on all aspects of retirement planning including tax and regulation as well as enabling users to track retirement savings including private and State pensions and other investments including property.
It aims to increase overall financial literacy levels and employee engagement with retirement planning and help staff to build up enough funds to retire at their target age. Employees can use the portal to outline scenarios on increasing pension contributions, for instance, and the impact on how they decide to take retirement income. They retain access to the service if they leave their job.
Employees enter and update monthly expenses as well as property ownership or rental costs, debts or savings, and health data including exercise, smoking and alcohol intake. Life expectancy is calculated using the death data run against mortality tables.