Let us work into old age, plead staff
More and more demand employment beyond pension age as they are struggling to pay bills
WORKERS nearing pension age in the vast majority of firms are pleading with their bosses to let them keep working so they can pay basic bills.
Experts say many of us are still stuck with mortgage payments and pension expectations that won’t cover their needs.
A survey of more than 136 firms of various sizes by insurance brokerage firm, Willis Towers Watson, found that 85% of companies have a set retirement age, with 90% of these setting it at 65.
And while 65% are considering becoming more flexible, only 18% have done so.
Brian Mulcair, head of corporate benefits consulting at Willis Towers Watson, said: ‘Sometimes this is out of a desire to keep working. However, for others it is out of necessity, with recent reports suggesting that many more people will carry a mortgage into their 60s.’
He added that the increase in the qualifying age of the State pension has also impacted on people’s decision. ‘The increase of the State pension age to 66 in recent years and the increase to age 67 in 2021 will also mean that some people cannot afford to retire before they start receiving this payment,’ he said.
In total, 71% of companies have received requests from staff to stay in work beyond retirement age. Personal finance expert John Lowe, of moneydoctor.ie, said many workers simply can’t afford to stop working. He said: ‘I see people every day that can’t afford a pension contribution much as they’d love to. Many people can’t afford it, yet it makes absolute sense. For every €100 you put into a pension, if you’re on the higher rate of tax it’s costing you only €60, you’re up 40% in one year alone.
‘You can see an anomaly between those people who are forced to retire at 65, they’ll be 68 before the State pension kicks in, what are they going to do for three years? They’ll have to hope they find a job doing something.’
Brendan Burgess, of askaboutmoney.com, said: ‘This doesn’t surprise me at all. There are various reasons for it, obviously financial that people haven’t got enough and are worried about the future. Also, a lot of people bought houses at high prices.
‘There are other people who want to continue working where they don’t have to.
‘I’d say a significant number of people enjoy going into work, they have a bit of fun with their friends. Even if the job is boring they just do it.
‘Also, people are paying for healthcare and lots of other things. Also, even though the economy is going well, a lot of people have seen the crash and the crisis and they might have children that they’d like to help to buy a house.’
Government projections show the number of people aged 65 and over will increase fourfold from around 450,000 now to 1.8million by 2050.
If the retirement age was left at 65, by 2050 – just 31 years away – more than a quarter of the country’s entire income would be spent on the pensions, health and longterm care of pensioners, according to Government projections.
Brian Mulcair said the Government is beginning to react to workers’ desire to work longer. Legislation was introduced at the end of last year to allow public servants stay at work up to the age of 70 if they choose to. He said: ‘Over the last year, the Government set out in its Roadmap for Pensions Reform that it has the clear aim of allowing employees flexibility to remain in the workforce for longer. The Workplace Relations Commission also released a Code of Practice for Longer Working.
‘In line with this we have seen the age at which the State pension becomes payable increase from 65 to 66, with a further increase to age 67 in 2021 and to age 68 in 2028.
‘In light of these developments, some employers are looking to review their generally inflexible retirement age policies in order to support those employees that wish to work beyond the traditional retirement age. Our survey results indicate the very varied and mixed approach taken by employers.
‘Irish companies have significant work to do in this area and are mainly behind the curve in terms of what might be seen as best practice internationally.
‘Companies need to consider how they can introduce flexibility in their employment contracts and how they will deliver employee benefits including pension, death benefit cover, and health and disability benefit insurance for employees remaining in the workforce.
‘Clear work policies in this regard are crucial, or employers could find themselves in challenging circumstances over the next few years as more and more employees request flexibility. Ever increasing numbers of age-discrimination cases are being brought.’
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