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The Actuary The magazine of the Institute & Faculty of Actuaries

Two in five employers concerned by ageing workforce

More than two in five UK employers are concerned about the long-term impact that an ageing workforce will have on their business, new research has uncovered.

Staff working longer ©iStock
Longer working lives ©iStock

After surveying employers with over 500,000 staff between them, the researchers found that 44% are worried about older employees that cannot afford to stop working.

This has become particularly concerning after the default retirement age was scrapped in 2011, making it increasingly necessary for companies to provide pension support.

However, most defined contribution (DC) pension schemes do not have adequate levels of contributions needed to maintain a similar standard of living for many employees.

“The impact of an ageing workforce is at the forefront of employers’ minds,” said Mark Pemberthy, head of DC and wealth at consultancy firm Buck, which carried out the research.

“More has to be done to tackle the problem head-on. Current DC contribution rates are not sufficient to help staff manage post-work life, and employers have an opportunity to help.”

The survey also found that 40% of employers want to empower workers to be self-sufficient when it comes to their retirement plans in order to avoid future issues.

A key aspect of this is education and support, with 84% saying they want to ensure their staff have access to online resources, while 33% want to provide more saving options.

This comes after separate research found that a majority of UK workers think pensions are confusing and don’t know how much to save, with many blaming employers.

The study also found that more than 90% of human resources leaders and pension professionals believe employers should provide more financial education for staff

“Companies have recognised this and are increasingly willing to offer a broader range of tools to help employees learn about saving, and implement workplace savings strategies,” Pemberthy said.

“This is a hugely important step towards tackling the issue of an ageing workforce that could become a significant productivity challenge for the UK.”

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