Survey shows pension impact of cost of living crisis

Almost half (49%) of working adults have changed their retirement plans because of the cost of living crisis, including 24% of people who are set to delay their retirement and 23% who have reduced their pension contributions, according to new research.

The research from the Pensions Management Institute finds one in 20 people have stopped their pension contributions entirely.

PMI Council Member Tim Box says: “Our research shows the concerns that many people have about how well they can prepare for retirement. With only 30% of our respondents believing that the State Pension will be more than half of their retirement income, the role of private pension provision to fill the gap is critically important. If the State Pension Age is to be raised to 71, as has recently been speculated about, then private pension savings are likely to be the only source of income between stopping work and the commencement of the State Pension for a huge swathe of those born after 1970.”

Two-thirds of those surveyed felt that they did not have the knowledge required to choose their pension provider despite nearly 60% showing some interest in being able to choose their own provider. The PMI says this is relevant to the government’s recent lifetime provider (“pot for life”) proposals and shows the importance of improving financial and pension education throughout society before implementing such a radical change.

Savers also said they value retirement benefits in the form of an income stream rather than a cash sum. 58% planned to take retirement benefits totally or mainly as an income with just 25% interested in taking their pension savings totally or mainly as cash. 81% of respondents valued a retirement income that would be guaranteed for life, with two-thirds attracted to an income that kept pace with price inflation.

Flexible working

Meanwhile, the Chartered Institute for Professional Development, along with members of the 50Plus Choices Employer Taskforce, is calling on policymakers and employers to focus on flexible working as a means of recruiting and retaining older workers. The task force’s new report, Flexible after fifty, reveals that three-quarters (72%) of over-50s in the UK want flexible work to achieve a better work-life balance – with a third (34%) citing caregiving responsibilities and a desire for more personal time as key drivers.

The task force includes the CIPD, the British Chamber of Commerce (BCC), the Federation of Small Businesses (FSB), the Recruitment and Employment Confederation (REC) and Business in the Community (BITC).

The report includes and highlights the growing uptake of different forms of flexible working among the over-50s:

– 33.2% (3.6 million) in the UK engage in part-time work
– rates of homeworking among over-50s have risen from 10% in 2020 to 22.4% in 2023
– 9% of over-50s use flexitime, which allows them to customise their start and end times within certain limits.

Ahead of the Flexible Working Act coming into force in April 2024, the report recommends that the Government lead by example by monitoring the uptake and effectiveness of flexible working across different age groups, and giving businesses better resources to help them put the legislation into practice. Other recommendations for the Government include:

– Provide a range of practical examples for use specifically with over 50s (including case studies) to help illustrate how flexible working can be used to aid retention, retraining and recruitment.

– Ensure resources on HR support are available for small and medium enterprises (SMEs) to help them implement flexible work legislation, including issues such as phased retirement.

– Review the skills and training offerings of both Job Centre Plus and the Department for Education (such as apprenticeships and bootcamps), to ensure they can be undertaken on a flexible basis.

And for employers, its recommendations include the active promotion of a range of flexible work options and monitoring of uptake and effectiveness, line manager support, flexible training and the inclusion of flexible options in all job ads.

• Vote  
• 0
• 0
• You already voted!