Findings from the latest Chartered Institute of Personnel and Development (CIPD) survey which tracks how employees are responding to changes taking place across UK workplaces, shows that employees approaching retirement age are much more realistic than younger people about the age at which they expect to retire.
The findings come in the light of the current ìpensions crisisî made up of a combination of companies closing their final salary schemes, an ageing population, longer lives, a lack of take up of stakeholder pensions and individual reluctance to save for the future.
Mike Emmott, the CIPDís Adviser on Employee Relations, says, ìThe government needs to make people aware of the need to act sooner rather than later if they are to enjoy an adequate level of pension. A substantial number of people have worries about their pensions and most of these are in practice unlikely to be able to take early retirement. ì
The survey, Pressure at Work and the Psychological Contract shows:
Young people are most ambitious to retire early: more than half of those under 30 would like to retire at age 50 or below. People in the NHS are less likely than those in other sectors to want to retire before 50. The finding is particularly alarming in the light of a recent PricewaterhouseCoopers (PwC) survey which suggests that a person born in 1980 would retire on just 30% of his or her final salary.
The average age at which people expect to retire is 60. Men expect to retire between 60 and 61 on average, with women expecting to leave at just under 60.
Older workers are also more satisfied, committed and motivated than younger ones. Employees aged 55 and above are twice as likely as average to be totally satisfied with the existing balance between their work activities and other aspects of their life.
The CIPD conducted telephone interviews in June and July 2002 with 1000 employed people aged between 18 and 65. Respondents were asked specifically about their expectations and hopes about their age of retirement and about the adequacy of their pension provision.
Emmott adds: ìWhile the survey shows that pensions are not a major source of anxiety or pressure, two out of five people are worried about their pension position.
ìThe government also needs to work on altering expectations if it wants to persuade people to stay at work longer. It has some powerful levers at its disposal ñ retirement expectations are influenced strongly by access to state or occupational pensions.î
The National Association of Pension Funds has recently recommended that serious consideration should be given to raising the state retirement age to 70 over ten years from 2020. CIPD believes that pensions need to be more flexible so that individuals have as much choice as possible about when to retire and more opportunity to combine work and pension. The Inland Revenue rules applying to occupational pensions schemes will need to be adjusted to make this possible and to provide an incentive for people to stay in work longer.
Other key findings
Single and divorced people expect to retire at later ages than those who are married. So family breakdown and reluctance to get married will tend to postpone peopleís expected retirement age.
People for whom work is a central life interest hope to retire later. UK employers will need to work to make work fulfilling and enjoyable if they are to support governmentís efforts to persuade people to stay on.
One in four employees considers their pension provision to be adequate, with two out of five saying it is somewhat adequate.
One in three of those aged under 25 believe their pension provision is not at all adequate. Those aged 55 or above, however, are more confident: 62% say their pension is either very or at least somewhat adequate. Unsurprisingly, public sector workers are more likely to regard their pension provision as adequate.
CIPD survey shows under 30s want to retire at 50 or below
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