AGE AND DISCRIMINATION – and the need for retirement planning

Not a month goes by without a reminder that many of us are going to have to work longer to have a decent standard of living in retirement.

Now that gold plated final salary schemes are a distant memory for most and because we are failing to save enough, there are many pensions pots that just won’t stretch far enough. Combined with the fact we are all living longer, there’s a very real need to keep an income stream going for longer.

Working longer is good advice but there are challenges along the way – age discrimination being one.

Almost 3 million recent job seekers over 50 (52%) believe their age has made employers less likely to hire them, according to a new report[1].

The ‘Working Late: Over 50s and employment’ study found that 46% of job seekers aged 50 – 59, and 64% of job seekers aged 60 – 69 felt their age put them at a significant disadvantage when looking for jobs.

It’s not just about those switching jobs later in life, however. Many retired people decide to enter back into the workforce – perhaps after a change of heart about retirement or due to a shift in circumstances.

Another study[2] revealed a lack of confidence in re-entering the world of work. More than half (55%) of retired people aged over 55 did not believe they would be able to find a paid job and only one in five who would like to work were confident they would be able to find paid employment.

The bleak outlook, particularly for women, is reflected in the latest official labour market statistics for the three months to August 2021[3] that show the effect on older workers of the coronavirus pandemic.

There has been a fall of 89,000 workers aged 65+ compared to the first three months of 2020. This is a percentage fall in employment of nearly 6.3%, nearly four times the rate seen in the 16-64 age group. There were 283,000 more ‘inactive’ over 65s since the pandemic – mostly retired – and nearly seven in 10 were women.

Be prepared

Looking for work is often motivated by money. When asked about driving factors for why over 50s were searching for a job, 29% stated it was wholly financial.

However, it’s not all about the cash. Over a quarter (26%) said that their search was driven entirely by other aspects, including life satisfaction as well as social and mental health benefits. The majority of respondents stated their motivations were equally financial and non-financial.

If working later in life is going to be viable, it is important that older groups are given the opportunities and support they need to stay in work.

From a financial planning point of view, this all reinforces the need for careful retirement planning to ensure your finances can stand up to these and any other challenges ahead.

The latest number crunching on retirement living standards[4] tells us the money needed for a comfortable retirement has increased by £600 to £33,600 a year for one person and by £2,200 to £49,700 for a couple.

While this differs for every individual, the earlier you start the better, regardless of the level of income needed.

For those worried about their finances and the implication it has on when they might retire, it is better to be aware of the options available than bury your head in the sand. An adviser can help you navigate your options, whatever your age.

Source:

[1] Over 50s in the labour market: a report for Legal and General. Centre for Economics and Business. 2021

[2] Just Group, Research conducted by Opinium on behalf of Just Group among 1,043 UK retired and semi-retired adults aged 55+, between 21st and 26th April 2021

[3]https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/earningsandemploymentfrompayasyouearnrealtimeinformationuk/october2021

[4] The Pension and Lifetime Savings Association’s retirement living standards, October 2021