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Don’t Leave Retiring Employees to Fend for Themselves

We’re working longer and face more complex choices on retirement. So it’s vital that employers play their part in planning the post-work future for employees.

It may be a natural human reaction, but we all tend to underestimate how long our lives will be. So we save for a future that we expect to be much shorter than it actually is. This ought to be a pleasant surprise, but instead, we find ourselves needing to fund an extra five, six, even 10 years – and from savings that may not have been enough in the first place.

We’ve now moved well away from the idea of the defined benefit scheme. The situation is more complex, but the employer still has responsibilities as the sponsor of the chosen pension plan – one that you’re contributing to alongside the employee. For both parties it’s vital to get this all-important investment right.

Why Employees Need to Act Now

The Office for National Statistics recently estimated that the number of over-65s in work has risen by 188% in just 20 years. That means the percentage of the workforce aged 65 or older has gone up from just 5% to 11% over that same time period. As well as the increase in the state pension age, this has been driven by the realisation for many that they cannot afford to retire yet and need to continue to add to their pension pots.

As well as working longer, we’re also far more likely to move jobs every few years. People entering the workforce in the 2020s can expect to have six, seven or more different employers during a career that may extend into their seventies. Not only might this create a patchwork of pension pots, but the job of managing that employee’s retirement will fall to their final employer. The responsibility of helping many people to make the transition from full-time employment, perhaps through part-time working, to a full retirement will be your responsibility.

This will also be made more complex still by the different levels of financial knowledge and the unique blend of objectives and financial resources of each employee. No two will be alike in their needs, with some having second homes and possibly inheritances, and others perhaps entirely reliant on their employer’s scheme and the state.

What Should Employers Be Doing to Help?

It may seem like a cop-out to say that there are few easy solutions to this conundrum. But doing nothing really isn’t one of them. Employees need help with navigating the new complexities of the pension world such as drawdown, and if you’re not part of that solution you should be asking yourself why not.

The most important thing you can give is access to an advisor able to assist your staff to make the right decisions for them. Partnering with a provider with the capability and resources to support you and your employees is vital.

The decisions faced by employees will not only affect what subsequently happens to them, but also how you are able to manage the departure of staff smoothly and efficiently.

Until human nature – and pension regulation – changes the onus is on employers to provide help to their employees and the necessary support to allow them to make informed choices about their future retirement needs. Helping workers avoid potential pitfalls such as cashing in their pension pot and facing big tax charges, or choosing poor value and inappropriate drawdown providers, is achievable.

It is surely not too much to expect employers to help their people find better places and means to get the information they need, be that about products or further advice and guidance – and from sources that are honest, reliable and independent.

The good news is that you’re not alone. There are organisations with the capability and resources to ensure that you can plan ahead and address the issues that you and your employees face in planning for retirement. And whatever your future might hold, it’s never too late to seek help.

ARTICLE BY: David Bird, Head of Proposition at LifeSight by Willis Towers Watson

Employees Feel Too Old For Apprenticeships
September 17, 2019
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Many employees would like the opportunity to start an apprenticeship or switch career but are worried they’re too old, according to Jobrapido.

Its research found that more than half (52%) of UK employees would readily embark on an apprenticeship if it could support a career change or move them to a different industry sector.

Of those that wouldn’t embark on an apprenticeship,nearly two-thirds (32%) believe they are too old and that the age limit is between 16 and 24. A quarter (25%) felt that apprenticeships would be a step down given their career experience.

The research also asked employees what the biggest obstacles to making a career change were. Three in 10 (30%) cited family or financial commitments, with a further 17% stating that a lack of confidence and that they would need to change their mindset. Nineteen per cent believed their lack of qualifications prohibits a change while the same proportion said they have no understanding of how to go about switching careers, and 14% said they are put off by the time it takes to retrain.

When asked what could support them to make a change, more than a quarter (26%) stated a change of mindset, followed by investment in training and/or educational qualifications or new skills (17%), support in the form of outside funding or a grant (12%), and government and/or industry support with further initiatives (11%).

CEO of Jobrapido Rob Brouwer said that age should not be a barrier to those looking to start an apprenticeship: “Despite the majority of the UK workforce being open to the possibility of apprenticeships, the vast majority have already ruled this out as they believe there is an age barrier in order to access [them]. The reality is that apprenticeships are open [to people] above the age of 16 and there is no age barrier.”

“Despite the majority of the UK workforce being open to the possibility of apprenticeships, the vast majority have already ruled this out as they believe there is an age barrier in order to access [them]. The reality is that apprenticeships are open [to people] above the age of 16 and there is no age barrier.”

He said that the government should work with education providers to reach out to workers who might consider themselves “too old” to embark on an apprenticeship.

“There has been a big drive in recent years to encourage more apprenticeships in the UK… Yet perception lags behind reality about the criteria and age of apprenticeships. This in turn is preventing more of the UK workforce from capitalising on the opportunities to retrain, acquire new skills and gain confidence in the workplace. All of which lay the right foundation to build an entirely new career,” he said.

“What is needed is an education drive from UK industry, the government, educational establishments and employers as to how anyone over the age of 16 can access and embark on an apprenticeship.”

Brouwer added that on the whole people no longer want a job for life. “We live in an era where a job is no longer a job for life and many could have at least two or even three different careers in their working life. It is not surprising that so many who took part in the research harbour ambitions to change their career path,” he said.

Jobrapido surveyed 1,444 employees who work across different industry sectors including sales, marketing, engineering, transportation, construction and technology in July 2019.