Older employees are putting retirement on hold

SME Publications/ SME XPO 2024

One in five employees and almost a third of those aged 55 and over have deferred their retirement date since the pandemic. They admit they are worried they won’t be able to afford to retire, with a quarter admit their retirement plans are simply not on track.

Such ongoing uncertainties are negatively impacting businesses across the UK, according to Close Brothers’ Workplace Financial Wellbeing Services. Their research reveals that for many, decisions around retirement are laden with confusion, indecision and anxiety, and this indecision is negatively impacting businesses.

Companies are currently experiencing blocks on succession, and while companies do value retaining experienced workers, there are some side-effects in engaging a higher proportion of senior workers for longer, with a higher average payroll and an increase in healthcare costs.

Companies are also experiencing difficulties in recruitment and talent development because there isn’t the turnover of senior personnel necessary to incentivise young, talented staff members.

The heart of the problem, say the authors, is a disconnect between what employees want and need to effectively plan for retirement, and what’s being provided by companies. Nearly half of employees want pension advice, but only a small number of companies offer it and, 17 per cent offer financial advice with a financial education provider and just 16 per cent give pre-retirement seminars.

Jeanette Makings, Head of Workplace Financial Wellbeing said: “Our report shows that anxiety has increased significantly when it comes to retirement decisions. It’s a weighty responsibility and the impact of getting it wrong is immense; it’s understandable people are feeling the pressure. And now, with the possibility of a one-pot pension, and yet more control being put into the hands of employees, the need for support, guidance and advice has never been more critical.”

In what may be seen as a further blow for a workforce that has been getting older for some time, new research has revealed that those aged between 50 and 64 are more likely to call in sick to work than any other age group.

Researchers analysed Office for National Statistics’ sickness absence data from 2018 – 2022 to reveal which demographics are most likely to miss work, and identify the most common reasons for doing so.

It comes against a backdrop of statistic that suggest every year, the UK workforce loses on average 146.6 million days due to sickness, which equates to approximately 4.5 days per worker – or almost a full working week.

The study, by personal injury experts claims.co.uk, found that those aged between 50 and 64 lost more days an average of 56.3 million total days per year. Per worker, this works out to approximately 6.1 lost days annually.

Interestingly, the 16 to 24 age group have only lost an estimated 10.2 million days per year – which is 65.2 per cent lower than to the average. This equals 2.7 days lost per worker each year. With regards to gender, women were found to call in sick for 2.6% of their working days a year – which is a 49.4% increase compared to men.

As well as looking at who reports the highest rate of sick leave, the study also identified the main reasons as minor illnesses like coughs and colds, an average of 33 million days is lost per year.

A spokesman for the report’s authors said : “Sick days lost from work can have detrimental effects on both workers and the company. For employees, frequent absences due to illness can result in increased stress and workload upon return, negatively impacting their overall job satisfaction and well-being.

“From the company’s perspective, a reduction in workforce attendance can lead to productivity losses and delayed project timelines. Given the contagious nature of minor illnesses, it’s no wonder they frequently lead to sick leave as they can spread quickly. Many are also left particularly vulnerable when commuting on public transport to work.”

SME Publications/ SME XPO 2024