Just under a quarter (23%) of respondents expect to have to work past the age of 65 due to the impact of low interest rates on their retirement savings, according to research by Canada Life Group Insurance.
Its survey of 855 full and part-time employees found that among this group, 16% had contemplated working beyond age 65 but now believe low interest rates are likely to push them to do so and 8% did not want to work past 65 but have now resigned themselves to doing so.
The research also found:
- Overall, 67% of respondents expect to work beyond age 65.
- 85% of 21-30 year olds expect to work past the age of 65, compared to 58% of 61-65 year olds.
- 20% of respondents say they will have to work for longer than they anticipated after reviewing their savings following the introduction of the pension freedoms.
- The reasons why respondents work past the age of 65 include: insufficient pension savings (44%); the fact they enjoy their job and would like to work for as long as possible (38%); the high cost of living despite having saved for retirement (25%) and concerns about the cost of long-term care (19%).
- Just under a quarter (24%) will have to continue working because they have not prepared for retirement or are not sure how long their savings will last.
Paul Avis, marketing director at Canada Life Group, said: “Seven years of rock bottom interest rates have had a lasting impact on a generation already plagued by insufficient pension contributions, with many forced to work past the age of 65.
“Recent reforms have spurred a long overdue national conversation about pension savings and a wave of employees have been confronted with the hard truth they are going to have to work beyond the traditional retirement age. The rising cost of buying a home and new savings options (such as the Lifetime [individual savings account] Isa) could mean younger people prioritise saving for other long-term goals above pensions, leaving them in an even weaker position when they eventually approach traditional retirement age.
“An older workforce, be it out of choice or financial necessity, brings with it many benefits, such as a wider skillset and breadth of experience. Employers also need to factor in a larger number of health issues, with older workers more likely to experience illness or injury.
“Employee benefits should reflect this changing demographic. Flexible working or workplace wellbeing initiatives can prove invaluable to older workers, while critical illness cover and income protection ensure much-needed support in the event of an accident or illness.”
