18 December 2018
Following closely on news of plans to make pensions information more readily available online (see Putting pension facts and figures at people’s fingertips) comes a suggestion that employers need to talk more openly with their staff about retirement.
The Centre for Ageing Better has marked the fact that December 2018 is the first time that someone turning 65 will not be eligible for a state pension by issuing The Experience of the Transition to Retirement: Rapid Evidence Review.
Available at www.ageing-better.org.uk, this 90-page report includes data showing that only half of those who plan to retire in the next five years are looking forward to it.
Two in five (41%) are worried about managing their money; a third are concerned about feeling bored (33%) and missing their social connections from work (32%); and nearly a quarter (24%) worry about losing their sense of purpose once they retire.
The report concludes that there is a general lack of both preparedness and planning for retirement across society, particularly among those on lower incomes. It also shows that women tend to engage in planning for life after paid work even less than men.
The Centre notes that, while many employers currently offer help on the financial aspects of the transition to retirement, a much broader approach to help staff prepare for the potential social, psychological and emotional effects is needed.
It recommends the “mid-life MOT”, a model that some large employers are offering across their workforce, which sees staff being given time out to discuss their career plans and development in mid-life.
Aideen Young, Evidence Manager at the Centre for Ageing Better, said: “Our message to employers is that it’s good to talk. Far from being a risk, being open and positive about how to manage the retirement transition will help them to retain experienced staff, who as a result will likely go on to experience more positive outcomes in later life.”
Comment from Peninsula Employment Law Director Alan Price
Making sure staff are prepared for retirement has not traditionally been high up on the agendas of HR professionals. Despite this, actively engaging with those that are approaching retirement age could be beneficial for an organisation in the long term.
When a retiring employee leaves an organisation they will often take with them years of experience and know-how which can be hard to replace.
However, employers should consider that many individuals may be retiring because they feel they have to, rather than because they really want to, and having open conversations with these individuals will allow you to find out how they really feel.
As a result, employers may also be able to come to a compromise with staff, such as introducing a phased retirement, to guarantee that their skills and experience remain with the organisation for a while longer.