Lack of retirement support could affect businesses

Small businessesTwo thirds of employers offer no structured retirement support to their older workers, research from Aviva has found.

Its Real Retirement report indicated that despite the lack of advice available, six out of every ten older workers would appreciate some kind of help in planning their retirement.

It warns that lack of engagement could lead to a loss of vital skills from older employees – an increasing number of which now choose to work past state pension age in order to boost their retirement income.

The number of older people still in employment who qualify for the state pension has nearly doubled from 7.6 per cent to 12 per cent in the last two decades, due in part to the ending of the default retirement age, better health and financial pressures.

Workers aged over 55 have typically been with their last employer for 16 years. According to the report, more than half of employers have invested in these employees by providing work place benefits such as pensions, private medical insurance, and annual bonuses, yet only a third (36 per cent) give their employees guidance in the run-up to retirement.

It said that many organisations did not feel that retirement advice was ‘their responsibility’.

With almost a third of older workers looking to work past the state pension age, Aviva indicated that businesses may be able to keep hold of valuable employees for longer through better engagement.

Aviva’s director Clive Bolton said: “While in this tough economic environment, employers have made great strides in supporting their employees with a range of financial benefits in the run up to retirement. However employers now need to consider how they can increase staff engagement and productivity by helping them to feel secure about their late life finances and use their retirement funds wisely.”

The report cites a generational attitude towards the type of support employers should provide for their older workers. It said that many of the oldest workers – those aged over 75 – felt that it was not the employer’s responsibility to provide retirement support, potentially because they were more likely to have had access to a successful defined-benefit pension scheme.

Those surveyed who had received support from their employer had welcomed it, finding workshops on retirement finances, written literature and a dedicated member of staff to discuss issues most useful.

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