Nearly three quarters of UK employees are set to continue working beyond their 65th birthday, with the cost of living and insufficient pensions among the main factors.
Seventy one percent of those in work - the equivalent of 23m people - won’t be able to retire at 65, according to new research from Canada Life Group Insurance. The figure is up from 61% since Canada Life began tracking the data in 2015, which, worryingly, shows that a further two in five people (37%) believe they will need to keep working until their 75th birthday.
The shocking statistics show a clear upward trend of employees staying in work for longer. Among those surveyed:
- More than seven in ten (71%) cite the rising cost of living as a reason
- Almost two thirds (62%) blame poor returns on savings
- Nearly a third (32%) say they need to continue earning a wage due to insufficient pension savings, rising to two in five (39%) 45-54 year olds - those approaching the traditional retirement age
- 58% say slow wage growth is a factor
- Brexit is causing economic uncertainty, according to 51%
When it comes to the rising cost of living, food prices in particular have been increasing at their fastest pace for more than five years, partly due to last year’s extreme weather and an increase in global import costs. Poor retirement planning is another reason why some employees will have to stay in work, exacerbated by recent changes to the UK state pension age, with a quarter of employees acknowledging that they can no longer rely on it.
Three in 10 people, however, are planning to go on working beyond the age of 65 because they enjoy their job and the social aspects involved, while 17% say that by staying in work, they will continue to receive valuable employee benefits such as income protection and life insurance. Among those surveyed:
- 17% say they value income protection
- Life insurance is a welcome benefit for 16%
- 13% appreciate the cushion of critical illness cover
- One in 10 are glad they have access to an Employee Assistance Programme
According to financial information business Defaqto, there are 22 whole of life insurance products available to people over the age of 65. Sheffield Mutual and BHSF offer cover up to the age of 69, while nine policies, from insurers including Canada Life, cover people up to 74. A range of providers offer life cover up to the ages of 83, 84 and 85 respectively, while Royal London caters for people taking out life insurance up to the age of 89.
Canada Life marketing director Paul Avis said: “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.”
In 2018, insurance payouts to bereaved families and ill and injured workers reached record levels, with protection insurance providers meeting more than £5bn of claims. Comparing life insurance, critical illness and income protection online is quick and easy, and the best way to see the different policies available to suit your lifestyle and finances.
If you’d prefer speaking to a trained member of our team, just call us on 0800 862 0373 and we’ll be happy to help.