Saving for Retirement

Aegon published its latest research into the savings market recently (entitled Effective Incentives for Savings)and the report reveals a lot of the complex issues about why people generally don't save enough for their older age. Apart from the general point that most/many financial services institutions are not trusted it reveals that there is a lot of negativity about pensions because they appear complex and the term "pensioner" is old fashioned and presumably conjures up a fairly stereotypical image in line with the "deficit" model and view of ageing.

While the report is really targeting the policy makers and suggests action that could be taken by government to improve the position, it clearly reveals consumer behaviour, not least that some research participants regretted leaving things too late with a preference for lifestyle today over lifestyle tomorrow.

A spokesman from the seemingly more lightweight piece of research from the Lloyds Group about new year resolutions,also stated "for many of us, saving is a bit like going to the gym, we know we should do it but we keep on putting it off".

It seems that one of the points in the Aegon's summary to increase the "focus on encouraging employers to engage with pension provision and maintain valuable employer contributions" is therefore well placed. Another aspect is that the cost to the employer of these incentives can be measured and countered in terms of improved competitive position through increased employee retention, enhanced reputation and improved social impact by their ex-employees having more income/better lives in their older age.

One of the Positives of Ageing

This is taken from page 86 of Haruki Murakami's book entitled "what I talk about when I talk about running."

" My muscles can be as stubborn as -or more stubborn than-I am. They remember things and endure, and to some extent they improve. But they never compromise.They don't give up. This is my body, with all its limits and quirks. Just as with my face, even if I don't like it it's the only one I get, so I've got to make do. As I've grown older, I've naturally come to terms with this. You open the fridge and can make a nice- actually even a pretty smart- meal with the leftovers. All that's left is an apple, an onion,cheese and eggs, but you don't complain. You make do with what you have. As you age you learn even to be happy with what you have. That's one of the few good points of growing old".

2011: ageing population finally on the agenda

Today the Governments confirms that it is abolishing the default retirement age of 65 effectively from April this year. This means that older workers have more control over their later years although many will still want to retire when their pension, if they are lucky enough to have one, becomes available. The Government seems to have ignored the pressure from employers and the CBI to delay their plans, largely due to the high costs involved of leaving things as they are. A key issue for all of us is that we can no longer afford to be economically inactive in our 60s when we have another 20-30 years more life in us.

In addition,this year the Government will be making progress on its plans to raise the state pensions age to 66 and the review of public sector pensions will also be published, as will a report on long term care.

2011 is hopefully going to be the year where real progress is made in tackling the very real challenges presented by an older population and hopefully will also present key opportunities for us all as we age.

Learning from leaf cutter ants!

An unlikely feature on this morning's Today programme on Radio 4 about Leaf Cutter ants and their performance in the work place seems very relevant to 2011 when the default retirement age is going to be abolished and employees can work longer. The research from Schofield et al "measures the efficiency of leaf cutter ants' mandibles". These are the ants whose duty it is to cut and carry something like 50 times their size in leaves (Tom and Jerry style).

As the ants wear with age the individuals with the most worn jaws are less than half as effective at cutting. Instead of making the ants redundant or them just dying, their role changes and they spend more time transporting leaf fragments sliced from their sharper sisters IE they still have a valuable contribution to make but that contribution has changed. Maybe there is something for us humans to learn from these tiny and industrious creatures for the new year.

Making retirement redundant

Today the Mature Times has published my latest article which you can see currently on the home page at www.maturetimes.co.uk. Basically older people will need to resign when they want to leave work rather than "retire" when next year's changes to the default retirement age come into force. This will have both cultural implications and an impact on current employment practices, particularly performance management. See the article for more details.

The Mature Times also covers another story about Longleat and the fact that management are to retire all their over 65s before the new legislation comes into force, next October. There are likely to be other organisations doing the same thing IE clearing out their older worekrs while they can.

The new legislation can't come soon enough in terms of ensuring that everyone is treated equally based on their abilities, capabilities, experience and skills and not a stereotypical view of what someone is like at a particular age. Hopefully more and more employers will recognise the benefits of this approach and get into the spirit of the changes rather than just complying with the law.

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.