It seems as though almost every day brings more updates on the ongoing issue of pensions in the UK. The group most directly affected by the issue are the Baby Boomers, who represent the generation born after World War Two, from 1945 until early 1960s. It is true that the Baby Boomer generation is one of the richest demographics in our society, with this generation owning close to £500 billion of the UK’s assets, equal to four-fifths of the entire nation’s wealth. However, as the Baby Boomers approach retirement age, many face concerns over the extent to which their pension will keep them afloat in old age.
Figures from 2009 showed that the value of private pension was severely damaged by the credit crunch and the recession, with the recession contributing to a devastating erosion in value of millions of savers’ pensions throughout the UK. The recession also brought about a fall in contributions to pensions as a result of economic downturn.
Many rely on protection from the government in the form of the basic state pension. However, the state pension is relatively low amounting to £110.15 a week for a single person in 2013/14. It is reasonable to question whether this really is enough to cover council tax, utility bills, insurance and groceries. Furthermore, not everyone is entitled to the full amount, and if a person has not accumulated the qualifying national insurance years, they will miss out. The situation is worst for the 1.7 million pensioners who are estimated by charity Age UK to live in a state of serious deprivation.
One response is to cut down on luxuries- scrimping and saving in order to save enough before time runs out. The Baby Boomers faced austerity after the war throughout their childhood, with rationing continuing until 1954. Is it fair that their retirement should represent a return to hardship and frugality? The situation may become more and more unmanageable for those affected, with advice bureaus warning: ‘The longer you put it off the more you’ll have to play catch up and make bigger sacrifices to fund the retirement you want’.
However, an answer to the pension dilemma is emerging. Currently, around 10% of people already continue working after reaching the age of 60 or 65, some remaining with their employer full time, others enjoying flexible working, or taking up new or self-employment either through choice or necessity. A change of law in 2011 means that compulsory retirement after reaching ‘the default retirement age’ is now a thing of the past. Britain already has highest post-retirement-age working populations in Europe, and it is fair to assume that this trend will continue into the future.
Like many other countries in the West, Britain’s population is aging, and it is more than likely that in the future working past retirement age may go from being a lifestyle choice to a necessity for the growth and maintenance of our economy. In the meantime, however, flexible working represents a real safety net for those in need of pension top-ups, and may act as a means for greater independence in one’s twilight years.
At Flexi Workforce we understand the UK’s growing demand for flexible employment to meet the needs of different demographics. We are keen to support this optimistic trend towards flexible work, and we look forward to enabling skilled older workers to find the independence they require in order to support themselves through their retirement.