Millions of UK workers are planning to stay at work past the old retirement age of 65, and as a result employer’s costs are expected to rise according to a new report.
Research by insurer Canada Life Group found that 35% of the UK workforce intends to continue working now they are not required to retire at 65; however this will lead to increased health benefit and insurance costs as older workers are more likely to become ill, the report said.
The online survey of over 1,600 UK employees discovered that men are more likely to continue working for longer, with 44% agreeing they would still be working past their 65th birthday, compared to 31% of women.
Paul Avis, Sales and Marketing Director at Canada Life Group Insurance, said:
“For older workers, health care provision and group protection products such as critical illness cover will become an increasingly attractive part of their employment package.
“If a substantial rise in the number of older workers should occur within the workplace, employers will find it hard to avoid providing these types of products, but may find it more expensive.”
Avis added:
“We would advise all employers to take into account the impact of the change to the average retirement age and review their benefit packages accordingly. By speaking to an adviser to ensure they are getting the most for their money, they won’t be faced with an unexpected bill.”
The survey also found that almost a third of those polled said older workers will make it harder for younger colleagues to progress because of “job blocking”.
In response to these figures, Dr Ros Altmann, for over-50s group Saga, said:
“While it is possible that health benefits and insurance will cost more for older workers, the skills that older people bring to the workforce and the benefits to our economy should far outweigh these concerns.
“By keeping more over-65s economically active we will be improving the medium-term job prospects for everyone in Britain.
“Millions of older people pulling out of the labour force with inadequate pensions would leave less money to spend on leisure, services and consumption.
“That would ultimately mean fewer jobs and lower growth for younger generations too.”