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Article | Pensions Briefing

How to get the most from an ageing workforce

A closer look at the GBAS findings

Future of Work|Integrated Wellbeing

By David Bird | March 22, 2018

David Bird from LifeSight looks at the results from the recent Willis Towers Watson Global Benefits Attitudes Survey and what this means for employers.

In this article, David Bird from LifeSight looks at the results from Willis Towers Watson’s recent Global Benefits Attitudes Survey (GBAS) and specifically how this affects employers as well as employees.

The number of people in the UK expecting to retire in their 70s is rising rapidly – from 15% in 2010 to 32% in 2017. This is according to the Willis Towers Watson Global Benefits Attitudes Survey (GBAS) that surveyed over 2,000 employees at medium and large private sector companies in the UK. Today there are considerably more people aged 65-69 in work than there were at the turn of the millennium (26% in 2016 compared to 14% in 2000).

Many Brits are not only expecting to retire later, but are also planning to keep working in one form or another as they retire from their main job. With this, comes a change to the way people plan their long-term savings – with more years in the workforce, what will happen to people’s pensions, and moreover, what does this mean for employers?

The impact on employers and employees alike

The fact that people are retiring later should not automatically be read as bad news: older workers have considerable skills and experience. But, the fact of the matter is, that those we surveyed are expecting to work longer out of necessity, not choice. The findings suggest that we have a group of employees who cannot afford to retire and as a result, feel trapped.

This has negative implications for both employers and employees. Those workers who anticipate retiring later are more stressed, less healthy and less engaged with their jobs than their counterparts who expect to retire by 65. This in turn, leads to them being less effective in the workplace. According to GBAS, those expecting to retire at age 70 or above are three times more likely to be suffering from high stress and twice as likely to be in poor health as those who expect to retire before they are 65.

In order to create a productive and engaged workforce, more needs to be done to educate employees about their long-term savings position. Online tools can be an effective route to engage scheme members with their savings. For example, LifeSight’s ageOmeter calculates an expected retirement age based on personal information known; this human metric makes saving more relatable, whilst real-time modelling allows members to see the impact their contribution and investment decisions could have on the age at which they may be able to afford to retire.

As employees age, it is only natural to see a change in their needs also. For instance, Generation Z (those born from the mid-1990s to mid-2000s) will have very different savings needs to Baby Boomers (those born from the mid-1940s to mid-1960s). Employers must embrace this and understand that a ‘one size fits all’ approach will not work to support and maintain an engaged workforce across the board.

Tailoring your communications

In order to ensure that everyone, regardless of age group, is aware of their pension and the options available to them, tailored approaches to communications are going to be key. Having the right lines of communication open at the appropriate time will help employees to better prepare for their retirement throughout their career, giving them a greater chance of retiring when they want to.

Technology can be used to help deliver tailored communications and is the preferred approach over mass-produced brochures and paper statements which offer little by way of personalisation. At LifeSight, we deliver personalised communications at specific times during an individual’s savings journey, to encourage them to adopt positive savings habits. Once logged in to their LifeSight account, individuals are guided through the site via an interactive platform which shows them areas deemed most relevant to them. This intuitive software is based on what we know about the specific individuals at any given moment in time and adapts as their savings journey progresses.

Going beyond traditional benefits

Employers should consider the benefits of offering a more flexible working arrangement to help those employees that have to work longer, feel better about doing so. For example, offering sabbaticals or time-out to study are some of the options outside of the traditional benefits scope that can help employees better manage their personal lives and wellbeing throughout their career.

Businesses need to think about whether their benefit programmes are fit to support an ageing workforce and provide a productive transition into retirement. Creating an environment where workers feel comfortable discussing their needs and options as they approach retirement age is important and this should encourage better retirement planning.

In addition, giving employees access to the tools that enable them to effectively plan for their retirement is also key. This will not only help ensure that people can retire when they want, but that they are productive employees for as long as they choose to be part of the workforce.

Looking to the future

In order for employers to be able to utilise the experience of an ageing workforce, as well as for employees to stay motivated and engaged, changes clearly need to be made. But, no matter what generation we are talking about, the need for not only more, but also varied communications about pensions and long-term savings is apparent.

At the end of the day, no matter how long your employees are with you, it is best to make sure that they are healthy, happy, and of course, engaged in the work they are doing. By helping them to better understand their financial position and offering them the option to adapt their working practices as they age, will give them a sense of security and optimism going forward. This in turn, gives employers the benefits and satisfaction of an engaged workforce.

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