Number of people working past pension age falls to 20 million

Covid-19 accelerates retirement plans for many, with health and unemployment key reasons.

The pandemic is accelerating retirement plans for older workers, with increasing numbers planning to stop working once they reach the state pension age.

Research by insurer Canada Life has found the number of people expecting to work beyond the state pension age of 66 fell from 71% in 2019 to 51% this year.

The pension provider suggests this shift could be driven by health issues brought on by the coronavirus pandemic and an increase in unemployment and redundancy among older workers.

Of those still not planning to retire once they hit age 66, 42% say their pension pot is too small to fund life after work and a fifth say they enjoy the daily routine of work.

Another fifth feel unprepared for retirement.

Paul Avis, strategic propositions director for Canada Life, says: “For some older workers, the events of 2020 have helped them realise they want to spend more time at home, with their families and learning new skills and hobbies. 

“Whereas for others, poor health and vulnerability may, sadly, have accelerated their retirement plans. 

“While unemployment continues to rise, job losses may be another contributing factor to this drop in the number of people planning on working beyond retirement age, especially for those receiving or expecting redundancy payments.”

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Avis adds that employers should support the wellbeing of their staff, whatever their age, with benefits such as employee assistance programmes, counselling and virtual GP services.

This is the first year the number of people planning to work beyond state pension age has fallen since Canada Life’s research began in 2015.

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Andrew Neligan, chartered financial planner for Neligan Financial, says the pandemic has changed people’s financial priorities.

He says: “Covid-19 has caused a lot of people to reflect on what they are doing with their lives and careers.

“It has a led to a reflection on the fragility of life and a realisation amongst people that they don’t want to spend too much of their active years working.

“It is also likely to have led to are re-prioritisation of what is important. People may be willing to live on less if it means having a bit more life for longer.”

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