The effect of the recession on pensions, savings, investments and property values has pushed up the number of people who are contemplating longer working lives, a new study has revealed.
The survey, conducted by the Chartered Institute of Personnel and Development (CIPD), found that more and more employees are aiming to stay in work once they reach 65.
In the CIPD’s Employee Outlook survey, which polled 2,000 people, the proportion of those aged 55 and above planning to work beyond the state pension age has climbed to seven out of ten compared with just 40 per cent two years ago.
Finances were cited as the main reason for wanting to postpone retirement.
Among younger employees, the realities of inadequate pension provision do not seem to have bitten quite so deeply. Just 30 per cent of people aged between 18 to 24 intend to work beyond the state retirement age.
Pensions also emerged as a real concern. Less than half of employees (46 per cent) said they had a pension with their current employers. Worse, only 23 per cent of people aged 18 to 24 have workplace pensions.
The split between pension provision in the private and public sectors was clear from the survey too. Nine out ten public sector workers have a pension with their current employers; in the private sector that proportion falls to just 36 per cent.
Charles Cotton, the CIPD’s reward adviser, looked to new pension regulations, due to come into effect in 2012, which will see workers automatically enrolled into a workplace scheme if they are not already members of a fund.
Mr Cotton said: “Employers need to review how they are helping their employees save for retirement to get value from their pension spend from 2012 onwards. With more people planning to work past 65, employers will have to accommodate older workers and motivate those who wish they could be elsewhere.”
Mr Cotton also warned that the lack of adequate retirement savings is an entrenched issue.
He added: “That so few private sector employees are saving for retirement through the workplace is a ticking time bomb for the UK economy and society. While auto-enrolment in 2012 is an important step in defusing this, more has to be done to get the message out to individuals that saving for retirement is essential, especially as the state pay-as-you-go pension becomes increasingly unsustainable in its current format.”
