MORE older workers HAVING to work into their retirement

Figures published recently by the Department of Communities and Local Government show that almost 250,000 people aged 65+ are still repaying their mortgages and that there are c1 million homeowners yet to clear their mortgage debts who are approaching retirement. Within 5 years the number of pensioners with mortgages is projected to increase to 1 million. This suggests that more and more older workers are likely to need to continue to work rather than retire. The removal of the deferred retirement age next year will at least make it easier for them to do so. These figures add further weight to the argument that employers should ensure that they have effective employment practices in place, particularly the need to update the skills of their older workers who may be employed for longer.

Change at any age

The Employer Forum on Age (EFA) and Cranfield School of Management have recently published research about career transitions. A key finding is the importance of the line manager in this process. The line manager has an " important role to play in ensuring that individuals received the right support and development in order to progress in their careers". The report goes on to say that " Employers may therefore consider providing training to line managers to ensure they are able to manage their subordinates' careers and support them in making career transitions".

This means that the line manager has an important part to play in the final transition IE out of work into retirement or part-retirement and the real question is how well equipped line managers currently feel about doing this?
The research showed that the decision of whether to retire or not was most likely influenced by an individual's financial situation, health and family and just over a third would consider working beyond 65.

The report also stated that "pre-retirement planning at a much earlier age than is generally the norm (if offered at all by employers) may be useful.

Employers concerned about workforce and succession planning issues, when the default retirement age is removed next year, might therefore like to consider the role and training needs of the line manager and the extra support that retirement workshops can provide to all parties as part of aiding future planning for the organisation and for the individual.

Company pension schemes and auto-enrolment

The Government announced yesterday that auto-enrolment into a company pension scheme will apply to all companies, whatever their size. This will obviously create more issues for smaller companies where the cost of implementation is disproportionate. But it does mean that future generations of older people, when all this becomes just normal business practice,are likely to have better incomes in retirement. That's the theory anyway. The changes come in from October 2012 for larger companies through to September 2016 for smaller ones.

We'll also be hearing a lot more about NEST (the National Employment Savings Trust) in the next few years. This has been set up by the Government for those organisations who do not have their own pension schemes.

With the default retirement age going in 2011 presenting many firms with an older workforce with some difficulties,followed by these new rules on pensions, employers are really going to have to concentrate some time on older workers. If they need help, they know where I am!

The future of retirement for couples

The biggest argument against increasing the state pension age has been because it impacts the poorest most IE those whose only source of income when they give up work is from the state. This is further exacerbated by the fact that these very same groups are less likely to experience as great an improvement in life expectancy as the rest of the population. Traditionally women have retired at 60 and men at 65 which means couples are able to enjoy retirement together from as young as 65. In the future,with the equalisation of state pension age at 66, this will mean for many couples, where the women are often younger, it might be 69 or 70 before they retire together as a couple.

This provides opportunities for services targeting the men who may be at home for several years while their wife works ie a reversal of the current position. It also suggests that employers need to consider providng sabbaticals/gap years/flexible options/ R and R, for people so that they can refresh and enjoy time off together long before they're both in their 70s.

2020: retirement age increased to 66 for all

So, the good news (?) from the Chancellor's Spending Review is that while extending the state pension age has been brought forward to April 2020, it hasn't been brought forward to 2016 as was originally rumoured! The pension age will be equalised at 65 for men and women in November 2018 meaning that women have a particularly raw deal as their pensions age is extended by 5 years from 2010-2018.

Trying to look at the positive side of this, we are living longer generally so a delay in retirement age should mean that we still have a good many years to enjoy in retirement. And, bearing in mind that as we get older society tends to write us off until the oldest generations become effectively invisible, maybe being "economically active" for longer will help to increase our visibility and value.

Strategies for older workers

The forthcoming abolition of the default retirement age has real implications for employers, particularly those with an older age profile of workers. There needs to be 3 clear strategies to deal with workers 1.staying beyond state pension age, 2.leaving and 3.incoming. All will be needed to ensure that employers maximise the performance of the talent available.

For those staying, employers will need to ensure that they have an effective performance management process in place, that their learning and development encourages on-going learning for all workers to update their skills and that inter-generational working and communication is maximised.All greatly benefiting all parties.

For those leaving, putting in place an employer supported retirement readiness programme will help workers to plan for a fulfilling older age encouraging them to think more positively about leaving, helping with workforce planning issues.

And the area which is often forgotten,making sure that the potential for older to come into the organisation is not ignored as many will the right skills and experience to improve the organisation's competitive position.

Countdown to retirement

You might be interested in my piece published in the Mature Times today about results from research about "retirement readiness" which I conducted recently. It showed that 50% of respondents, who indicated they were within 5 years of retiring, had not even started thinking or planning seriously about their older years. One respondent said about the questionnaire, "I just found this worrying. I suppose if I'm positive then it was thought provoking...but since I am so unready I found it depressing".

Employers need to really get their act together to provide their employees with support services to help them with their new life after full time work ends, so that they are more ready, and better equipped, to get the most out of this important time. This will become increasingly important to employers when a formal retirement age is phased out next year. See more at wwww.maturetimes.co.uk/node/11257