A fifth of workers delay retirement plans due to cost of living

A fifth of workers approaching retirement have had to scrap their plans to stop working as the cost-of-living crisis continues to pile pressure onto household budgets. In fact, less than a quarter of over 50’s have adequate savings in place to fund retirement.

New research published today from insurer Zurich UK¹ found that 18% of adults over 50 had to delay retirement plans due to the increased cost of everyday living, whilst one in ten were forced to continue working after volatile stock markets ate into their savings pots.

The survey of 2,000 over 50’s, both still in employment and retired, found that despite these financial pressures, one in five (21%) were forced to stop working early due to ill health. A further 16% retiring before the state pension age to care for a loved one.

But the research also revealed that a third of those in this age group would be able to stay in work for longer if a greater number of flexible working opportunities were available. A further 28% could be tempted out of retirement if they simply had the option to work from home. Despite this, data from Timewise shows that only 12%² of job vacancies in the UK offer part-time hours and many of these are much lower paid roles.

This comes after the Bank of England voiced concerns that a marked rise in economic inactivity among the over-50s could hold back growth, with 386,000³ leaving the workforce since the pandemic.

Meanwhile a recent House of Lords committee found that early retirement was the key driver of economic inactivity in Britain⁴.

The Government recently announced a £70m support package to address the exodus of older workers, but Zurich’s research indicates the problem could be largely alleviated if flexible working opportunities were available from more employers.

Current Government proposals include better access to skills and training alongside the roll out of a new digital Mid-life MOT check to help workers understand the impact of their employment choices on their retirement income.

Nick Homer, head of group risk market management for Zurich UK said:

“As well as urging more employers to offer flexible working options, Zurich is calling on the Government to enhance employer guidance and improve their awareness of the link between good work and good health and promote the use of expert-led support services to support employee wellbeing. The role of employers to support employees with health and wellbeing is becoming increasingly important and everybody benefits.

“Workplaces that provide products like income protection enable employees to access swift treatment and support for medical conditions, which can lead to a speedier recovery and means they are more likely to remain in work.”

Dr Carole Easton OBE, Chief Executive at the Centre for Ageing Better, said:

“If employers want to address their skills and labour shortages, then they need to take an open approach to flexible working. We recommend employers advertise all roles as flexible for everyone, for any reason, where possible and also make clear that flexible, hybrid or remote working is welcome from day one, rather than on request. It is also vital that employers support line managers to develop and manage a flexible working arrangement that works for employer, manager and the organisation more broadly.

“Some employers are already showing they truly value the vital contribution that older employees make and we are very impressed with the policies that Zurich Insurance have put in place to support their experienced workers. If other employers want to know how they can create a more attractive work environment for older workers, they can follow in the footprints of Zurich Insurance and sign up to our Age-friendly Employer Pledge.”

What does the world look like for Zurich’s 1,200 experienced workers?

• All roles are advertised as available on a part-time or job-share basis as well as full-time – over 50s make up a third of Zurich UK’s part time working population
• Zurich has been a flexible working advocate for over a decade – for 77% of employees over 50, this makes the insurer their employer of choice⁵.
• Hybrid working is available for employees to balance their time between the office and working from home – this is the most popular benefit for 79% of employees⁶
• A recently launched menopause policy involved the roll-out of training for 700 people leaders
• The insurer has also introduced a mental health policy with training for all UK people managers and wellbeing support for all employees
• People have flexible retirement options – they can do so on a graduated basis or switch working patterns
• Employees are given private health care, life insurance and income protection – these benefits rank most highly for 61% of employees over 50⁷
• Zurich was one of the first signatories of the ‘Age-Friendly Employer’ Pledge from the Centre for Ageing Better
• Training and upskilling opportunities are available regardless of age - over the last 12 months, one in ten employees over 50 engaged with online learning
• Apprenticeships are available to all employees – around 60% are undertaken by established employees of all ages

¹ Onepoll 2000 adults 1000 retired and 1000 aged 50 and over still in employment 22 Feb – 3 March 2023
² The Timewise Flexible Jobs Index 2022
³ Ons Reasons for workers aged over 50 years leaving employment since the start of the coronavirus pandemic - Office for National Statistics
⁴ https://committees.parliament.uk/committee/175/economic-affairs-committee/news/175197/early-retirement-and-our-ageing-population-are-causing-labour-shortages-says-lords-report/
⁵ Staff survey March 2023 429 respondents
⁶ Staff survey during March 2023 429 respondents
⁷ Staff survey during March 2023 429 respondents