– 51 % of Britons wish to continue working after they reach the retirement age as a way of staying active
– Less than one in five retired people think that it’s their responsibility to leave an inheritance to their children
Old age has been delayed indefinitely. The age at which Britons consider themselves ‘old’ is steadily moving upwards as the UK’s older citizens spurn the traditional view of ageing.
Whilst many people today view ageing and retirement pessimistically a report from Friends Provident reveals there is scope for optimism. In the fourth chapter of the Visions of Britain 2020 series (www.visionsofbritain2020.co.uk), Ageing and Retirement, it was found that Britain’s ageing population are healthier and more energetic than any previous generation.
Over half (51%) of respondents stated they wish to continue working after they reach the retirement age as a way of staying active. This dynamic ageing population is creating a demand within the British workforce for alternative ways to fund retirement.
Moreover, 47% of respondents fear that they will get bored when they stop working with 43% stating that they enjoy the social contact that comes from being in a working environment.
In 2020, older Britons will be having a colossal impact on local communities through volunteering and are already doing so with 51% of volunteers being aged 60 years or over (British Household Panel Survey/The Future Foundation). By extending their working lives or volunteering, the survey respondents felt that they were making contribution to society whilst also remaining engaged.
Trevor Matthews, CEO Friends Provident Holdings (UK) said, “It is important to recognise that although our ageing society creates a number of challenges, there are also many positive factors to consider. The definition of old or retired has evolved and by 2020, the face of retirement will look completely different from the one that we have become familiar with in recent years. People are living longer and this new breed of energetic and healthy individuals want to remain involved and not become economically inactive. These individuals will not only continue to contribute to their pensions with their continued earnings, but those who will position their activity towards volunteering will make momentous contributions to their local communities.”
Though Britons have already started to see an end to ‘cliff edge retirement’ and a steady turn towards phased retirement, this trend will intensify dramatically in the next ten years. By a ratio of two to one the Delphi Panel of experts felt that older workers will seek jobs which carry less responsibility as they wind down to full retirement. Because of this increasing trend, employers in the next decade will have to act swiftly in adapting their businesses and the roles within them for the new breed of older workers.
Surprisingly, despite the fact that the amount that people inherit, on average, has increased by 80% in the last 11 years (at real 2008 prices), less than one in five retired people think that it’s their responsibility to leave an inheritance to their children. Instead retired people expect to help their children with education and housing costs. Moreover, 26% of grandparents stated that they expect to contribute to the cost of tertiary education.
Trevor Matthews continues, “Because we are living longer, it is therefore understandable that a majority of retirees will then spend what may have at one time been left as an inheritance for their family, during their retirement.”
As life expectancy continues its upward trajectory, people will continue to fund their retirement through a number of different vehicles including savings, state pensions, employer pensions, shares and an extended working life. Over one-third (37%) of workers stated that have a company pension scheme, but less than 40% of the sample felt that employer schemes were better than private schemes. Conversely, despite the fact that a house is usually considered to be the largest asset that most retired individuals have, 77% of retired Britons wish to remain in their home and do not want to fund their retirement through equity release or downsizing their property.
“As individuals we now have more choices, but coupled with this comes increased responsibility and the need to plan adequately for our own retirement. It is crucial that we do this planning early enough in life whilst we have more options available to us rather than waiting until we reach our mid 60s when the only stark choices might be to keep working into our 70s or accept a lower than expected standard of living in retirement. As part of this planning, it is important to consider whether we are still on target to be able to retire when we want to or whether we need to take some further action and indeed whether our aspirations for our life in retirement have changed. Employers can play a pivotal role in encouraging and supporting their employees to ensure their savings are on track to meet their retirement goals, especially as they reach their mid 50s and the prospect of retirement begins to take more significant in their thoughts”, said Matthews.
Source : Friends Provident Press Release
