The over-50s are increasingly in need of advice, with the Covid-19 pandemic set to have a lasting impact on the job market.
According to the Office for National Statistics, older workers found they were working less hours than usual as a result of the pandemic, while a large number were furloughed or felt at risk of losing their job.
Conversely, a shift in working patterns, with an increased number of over-50s working from home, could have a positive impact on keeping a larger number of older workers in the workplace. Those who were working entirely from home were more likely to say they were planning to retire later (11%) compared with those not working from home (5%).
Jon Greer, head of retirement policy at Quilter, said: “With this cohort retiring later as a result of being able to continue working, they need to make sure they make the most of it with their savings.
“A lot of this cohort will be saving on commuting costs as a result of working from home, while some will also be mortgage free and as a result will be seeing more money in their bank account than usual.
Greer said with people staying in work longer, there will be extra time ahead of retirement to get finances in order.
Greer added: “Sorting out your financial plan just before you retire is not an efficient way to ensure you don’t run out of money. Planning early means you have the correct investments and know when to begin the transition to a lower level of risk. Working for a few extra years gives you the time needed to sort your plan out now.
“The UK faces a crisis when it comes to pensioner poverty, with rates of poverty particularly in single pensioners increasing in recent years. With working from home making it possible for people to remain in the workforce for longer, we hope to see an increase in financial security. However, we need to ensure people have the impetus to do so, making it as easy and straightforward as possible to engage with their pension.”
But the ONS said it remained uncertain whether older workers who had transitioned to remote working will continue to have this flexibility in the future.
Nearly two fifths (38%) of businesses expected 75% or more of their workforce to be at their normal place of work after lockdown restrictions were lifted, whereas more than a third (36%) working from home thought they would continue to spend all or most of their time working remotely.
Cheney Hamilton, CEO at recruitment group Find Your Flex, said: “The evidence from the job seekers approaching us is that older workers are being pushed out of pre-pandemic roles in their thousands. The fallout from Covid-19 and the wholesale switch to remote working seems to have hit older workers particularly hard.
“Many older workers are seeking flexibility to accommodate a better work/life balance and people’s mindsets have changed irreversibly as a result of the pandemic.”
However, the early exit of people aged between 50 and state pension age could wipe £88 billion from the economy and negatively impact an individual’s future financial security, the ONS warned.
According to the ONS data, women are much more likely to be economically inactive before state pension age than men. The findings showed that 17.9% of women were economically inactive at 50 years old, compared to 9.6% of men, while 58.6% of women were economically inactive at age 64 compared to 44.9% of men.
Tom Selby, head of retirement policy at AJ Bell, “While in some cases stopping work early will be a voluntary decision – for example as a result of early retirement – in other situations it will be less voluntary, such as ill-health.
“Worryingly, although perhaps not surprisingly, people who work in low-paying or physically intensive sectors are six times more likely to stop working before state pension age because of ill-health than those working in other professions.
“What’s more, women are more likely to stop working early than men, potentially further perpetuating the gap in pensions between the sexes.
“Stopping working in your 50s – when in theory your earning power and ability to save should be at its highest – could also have a significant impact on people’s retirement outcomes. In many cases it will mean making your retirement income stretch for much longer, meaning you have to live for less in your later years.”
Selby said that helping people in their 50s to stay in work for longer should be “absolute priority” for policymakers.
