Better support for 50+ year olds in the workforce could help millions have a better quality of retirement and unlock billions in economic value.
Ask someone, especially if they’re in their 50s, if they would like to work longer and the response will probably be a groan. But as we live longer, the gap between what we’re saving from our career and the pension we need for a decent retirement grows.
In the UK, there are 3.5 million people aged 50–65 who are not currently working. A complex combination of blockers is at play, either pushing people out of the workforce or making it difficult for them to rejoin. Changing this would not only help sort the pension savings gap, but it is an untapped source of economic value waiting to be realised. However, the solution is as intricate as the challenge.
The answer requires working together
Different obstacles fall under the remit of different government departments, so it needs a concerted and collaborative approach to bring about a fundamental shift.
“We are advocating for a cross-departmental government strategy to support people, particularly those over 50, to stay in work longer,” says Catherine Foot, Director, Phoenix Insights.
“Obstacles around flexible work and career guidance make it harder for people to work longer, and in turn save for retirement – which prolongs the pension gap we have in the UK. We have the expertise to address these challenges and make retirement comfortable for millions more people.”
By bringing these teams together – including the Department for Business and Trade, Department for Work and Pensions, Department for Education, Department for Health and Social Care, and HM Treasury – we can better support people to stay in work.
We also want to improve connected health and wellbeing practices – from better access to guidance around going through the menopause, to supporting the recruitment and retention of people with long-term health issues.
A clear roadmap for action
As the UK’s largest long-term savings and retirement business, we’ve been able to develop a holistic and deep understanding of the retirement challenges facing our society. We have developed our findings into a roadmap, which sets out five key policy changes to support people saving for retirement – including supporting people to stay working until the state pension age. This is a foundation which any cross-departmental government strategy can build upon.
A multi-billion boost to the UK economy
When it’s a conscious choice, a longer working life can have significant benefits for both the individual and the economy.
Data from the OECD shows that people who make voluntary career moves in midlife are more likely to be working in their 60s. And alongside helping people stay active, save more, and enjoy a more fulfilling retirement – not to mention closing the pension savings gap – there is the economic case. Increasing employment among 50–64 year olds by just 1% could add almost £6 billion a year to the UK economy.
Work that fits in with our complex lives
Despite this, according to the OECD, making successful career transitions can be more difficult for older workers. Reasons include health issues, unfamiliarity with relevant technology or a lack of recent job search experience.
Whether to accommodate caring responsibilities or personal health, a lack of flexible working can also have a significant impact. And there is evidence that those over 50 have less work flexibility than other groups. Almost 2 million people have left a job in the previous year due to a lack of flexible working, while 4 million people have changed careers altogether because of a lack of flexibility within their sector.
The right to request flexible working came in earlier this year, but we are advocating to make all forms of flexible working the norm and reduce the reasons a business can refuse a request.
Access to life-long careers guidance
The lack of guidance for people looking to change careers at a later stage is also a factor. We believe free, independent careers advice should be something that every worker can access throughout their careers.
And there is a clear need for it. According to our research 31% of 45–54 year olds expect to change career before they retire – yet 51% have never heard of any careers information or advice services.
Alongside this, workers over 50 find it harder to access work-related training and re-enter the workforce than younger age groups. Given, in the UK, one in three workers are aged over 50, an increase in lifelong learning opportunities would be welcomed.
This year, we launched our Careers can change campaign, which signposts people to partners who can offer all kinds of advice related to changing career.
Let’s talk
With the 100-year life fast becoming a reality, change is needed to give security and comfort in our later years. That’s why we’re calling on the government to take action.
Together, we can make work more dynamic and rewarding, and help people be better prepared for the retirement they deserve. Close collaboration between government departments is the first step.