31 Jan 2019
With today marking the first time that someone turning 65 will not be eligible for a state pension, our new report says a significant number of people are worried about leaving work and highlights a lack of planning and preparation for retirement across society.
As planned state pension age changes come into effect today, the Centre for Ageing Better is calling on employers not to shy away from talking to their staff about retirement, including when and how they want to retire and to ensure they are providing support to help staff plan for the transition.
The Centre for Ageing Better’s report 'The experience of the transition to retirement: Rapid evidence review' published today, says that a significant number of people worry about retiring. Data from a poll of over 50s carried out last year suggests that only half of those who plan to retire in the next five years are looking forward to it. Two in five (41%) are worried about managing their money; a third are concerned about feeling bored (33%) and missing their social connections from work (32%); and nearly a quarter (24%) worry about losing their sense of purpose once they retire.
The report concludes that there is a general lack of both preparedness and planning for retirement across society, particularly amongst those on lower incomes. It also shows that women tend to engage in planning for life after paid work even less than men.
People with a high sense of control over the decision of when to retire are more likely to plan for the transition and to have better outcomes in later life as a result, it says. As life and work patterns change, the Centre for Ageing Better is calling on employers to consider the role they play in improving peoples’ readiness for retirement and to provide staff with a supportive environment in which to discuss plans and offer guidance on preparation.
While many employers currently offer help on the financial aspects of the transition to retirement, they need to take a much broader approach to help staff prepare for the social, psychological, and emotional effects retirement can have. Pre-retirement support must be a central part of employers’ efforts to be age friendly – which should also include practices such as offering flexible working and supporting older workers to manage health conditions in the workplace.
These aspects could also be incorporated into the ‘mid-life MOT’, a model that some large employers are rolling out across their workforce, which sees staff being given time out to discuss their career plans and development in mid-life.
Government can play a part by promoting existing guidance. It can also support employers to help them encourage more open workplace discussions about age and provide employees with the tools they need to plan for the transition to retirement.
“We often hear that, following the removal of the default retirement age, employers have become worried about talking to older workers about retiring for fear of being ageist. And yet employers have a pivotal and very positive role to play to support people to think about and plan for this major life transition. As working patterns change and become more fluid, the need for support and guidance to help people think about their future only increases.
“Our message to employers is that it’s good to talk. Far from being a risk, being open and positive about how to manage the retirement transition will help them to retain experienced staff, who as a result will likely go on to experience more positive outcomes in later life.”