Many British workers are unaware of state pension age increases, according to a report from the CIPD.
In a survey of more than 1,600 UK employees 26% of those aged 55 and over claimed that they did not know the state pension age will increase from 65 to 66 between 2018 and 2020.
Furthermore, almost half (48%) of 35- to 54-year-olds said they were unaware that the state pension age is going to increase from 66 to 67 between 2026 and 2028.
The researchers also found a significant proportion of employees who didn't know they need to have paid National Insurance contributions (NICs) for 10 years to get the minimum state pension (36%) and that they must have paid NICs for 35 years to get the full state pension (32%).
Charles Cotton, pay and reward adviser at the CIPD, expressed concern over the findings. “It’s clear that many people aren’t fully aware of what kind of pension they might receive or when, especially if the state pension is going to form a significant part of their retirement income,” he said.
“If they find out too late what they are entitled to then they may be forced to remain at work out of necessity rather than choice. Employers will need to look at how to meet the needs of this group and HR has an important role in communicating changes to the state pension to employees.”
Additionally, more than a third (37%) of those surveyed believe they will have to work past the age of 65, a figure that jumps to 49% for workers over 55-years-old. Among those who predict they will work past 65, the average age they expect to actually retire is 70.
The most common reasons for employees wanting to work past 65 are that many people believe it will keep them mentally fit (32%), followed by a desire to earn enough money to continue to enjoy themselves, for example by going on holidays (27%).
Cotton explained that older workers can bring benefits to firms. “Older workers offer vast experience and knowledge and can also act as mentors to young people,” he said. “To reap those opportunities employers need to start reviewing and adapting their people practices as well as the design of the organisation, jobs and work to ensure that they are fit for the new purpose.”
He added: “Previous CIPD research has shown that multi-generational workforces are of huge benefit to organisations. It is very positive to see that employees are also recognising that remaining at work can help their wellbeing by helping them to keep mentally fit. In return organisations have a duty to build workplaces that enable talented older workers to continue to work without facing organisational barriers.”