A recent YouGov poll for the Department for Work and Pensions (DWP) (the full results of which can be found here) showed that the main reason for continuing to work was ‘needing’ to earn money (31%). This statistic resonates with our work with employers.
Since it has been unlawful to force people to retire unless there are objectively justifiable reasons for doing so (age discrimination), people continuing to work beyond traditional retirement age are becoming a primary consideration for businesses when it comes to succession planning and the provision of benefits.
The fact that nearly half (49%) of those polled now think that they will retire later than they thought they would goes to suggest that this issue is something that is likely to gain momentum.
The key questions from the employers we work with are: “how can our benefits package accommodate the diversity of our workforce?” and “how do we pay for it?”.
The cost of employee benefits can escalate (sometimes rapidly) as cover is provided beyond a traditional retirement age. As a result, many employers utilise the exception to the principle of equal treatment on the grounds of age for group risk insured benefits, while other employers continue to fund ongoing insured benefits.
As the responsibility appears to continue to shift from government to employer, and then on to employees to fund benefits, it is likely that the use of flexible (and voluntary) benefits will continue to grow at a pace.
Whatever the future holds, making sure that employees fully understand and appreciate the benefits on offer is key to an employer’s staff reward and commercial success.
Risk & Flexible Benefits Consultant