Experts indicate that the UK’s state pension age might need to increase to 71 for those born after April 1970 due to longer life expectancies and declining birth rates, making the current retirement age financially unsustainable.
Despite plans to raise the retirement age from 66 to 67 by 2028 and to 68 by 2044, the growing trend of workers retiring early due to preventable health issues suggests that these measures may not suffice.
Les Mayhew of the International Longevity Centre, alongside other experts stress the economic strain of a growing retired population on a shrinking workforce, advocating for policy reforms like raising the retirement age, implementing wealth taxes, and enhancing health measures for a sustainable, equitable pension system. The government is responding with support for the over-50s’ employment and health service investments to tackle these issues.
Graham James, Director at Pluxee UK, has provided a breakdown of how exactly the increased retirement age can affect employees financial, physical, social and mental wellbeing.
- Financial Wellbeing: For those who are financially prepared for retirement and have sufficient savings or pension plans, an increase in the retirement age might not have a significant impact. However, for individuals who rely heavily on retirement benefits or who haven’t had the opportunity to save adequately, extending the retirement age could create financial strain and negatively affect wellbeing. Often, retirement planning is seen as boring, and younger workforces tend to ignore it until later.
- Physical Wellbeing: Continuing to work beyond traditional retirement age can have both positive and negative effects on physical wellbeing. On one hand, staying active and engaged in work can contribute to better physical health and longevity. On the other hand, for those in physically demanding jobs or experiencing age-related health issues, prolonging the working years could lead to increased stress and fatigue, and alternative options might need to be considered.
- Mental Wellbeing: The impact on mental wellbeing can be significant. For some, staying engaged in meaningful work can provide a sense of purpose, fulfilment, and social connection, which can positively impact mental health. However, for others, the prospect of having to work longer than expected or desired can lead to feelings of stress, anxiety, and disillusionment, especially if they are looking forward to retirement as a time of relaxation and leisure.
- Social Wellbeing: Delaying retirement may affect social relationships and networks. Some individuals may find it challenging to maintain social connections outside of the workplace, leading to feelings of isolation or loneliness. Additionally, caring responsibilities for ageing family members or grandchildren may conflict with extended working years, further impacting social wellbeing – grandchildren and child support will also have an impact on families requiring dual incomes.
- Employment Opportunities: Extending the retirement age could also affect employment opportunities for younger generations. If older workers remain in their positions longer, it may limit opportunities for advancement or job mobility for younger workers, potentially impacting their career trajectories and overall wellbeing.
Employers need to consider how they help employees navigate these changes and provide adequate support around thinking about this impact. The impact of increasing the retirement age on wellbeing is complex and multifaceted, and it varies depending on individual circumstances and societal factors, which makes it difficult for employers to create a one-size-fits-all approach. It’s essential to consider these nuances and implement supportive measures to mitigate any adverse effects on the wellbeing of those affected by changes in retirement age.
Joanne is the editor for Workplace Wellbeing Professional and has a keen interest in promoting the safety and wellbeing of the global workforce. After earning a bachelor's degree in English literature and media studies, she taught English in China and Vietnam for two years. Before joining Work Well Pro, Joanne worked as a marketing coordinator for luxury property, where her responsibilities included blog writing, photography, and video creation.