Pensions & employee benefits roundup - December 2017

Katri Tuomainen, 11 December 2017

What is an “unretiree”? We saw some interesting research from the University of Manchester and King’s College London of a number of pensioners are now making the choice of returning back to work after first retiring. Around a quarter of UK retirees “unretire” or return to work after retirement. 

Those retirees who “unretire” mostly return to work within five years of retirement, while returning to work after ten years is rare.  The desire to come back to work does not seem to be driven by financial necessity as the research from the University of Manchester and King’s College London found those with financial problems before retirement were no more likely to go back to work than those without.  The authors suggest that the access to paid work may allow retirees to improve their financial and general wellbeing. The income from work can allow unretirees to supplement their pensions while being at work also can help them to stay physically and mentally active and maintain contact with others.

Moving from work to retirement is among the life’s key events so it isn’t surprising that the change can also create concerns. According to our research the main non-financial concerns that employees have when they retire include concerns about being bored (25.5%), having no purpose throughout the day (22.2%) and missing the routine of work (21.4%).   Both the concerns regarding retirement and the potential benefits of unretirement are tied to the same broader themes, the desire to remain active as well as the need to have meaning and social interactions in one’s daily lives.

Retiring actually used to be a pretty straightforward process with people saving into a pension, reaching retirement age and then retiring completely with a regular income.

These expectations for one’s retirement have changed and the view of retirement as a cliff edge type life event has been replaced with a wider set of options that are now available to retirees who can now tailor their path through retirement to suit their preferences.

A more phased approach to retirement has grown in popularity with the traditional style retirement (retire completely from work on a set date) being rejected by many retirees. Our research illustrates the strong appeal of these arrangements: 76.2% of employees aged 55 and above say they would consider a phased approach to retirement.

Following the pensions freedoms, retirees also now have more flexibility in how they wish to take their retirement benefits. Of the employees we surveyed, 56.3% of employees would indeed like a degree of flexibility around retirement and to be able to change their pension income at retirement when their circumstances change.

A final thought: the timing of the surge in so-called unretirees may be apt, if the findings from the Business in the Community research of a future labour shortage come to fruition.

--

Throughout the month our research team keep a close eye on what is happening in the pensions and employee benefits industries. Here is a roundup of the best news articles and stories for November 2017.

Pensions in divorce – women lose out on £5bn every year
Scottish Widows, 1 November

Seven in 10 couples don’t consider pensions during divorce proceedings, leaving women short-changed by £5bn every year, according to new Scottish Widows research.

Unretirement - one in four Britons return to work
University of Manchester, 1 November 

Around one in four retirees in the UK return to work or ‘unretire’, mostly within five years of retiring, according to research by The University of Manchester and King’s College London.

TPR reviews value for member assessments in DC schemes
The Pensions Regulator, 6 November

The Pensions Regulator (TPR) has launched a review into whether trustees are carrying out adequate assessments of the costs and charges paid by members.

Employees’ perceptions about pay fairness and transparency are five times more impactful on engagement than actual compensation
PayScale, 7 November

How employees feel about the pay process at their organization, in terms of fairness and transparency is 5.4 times more impactful on how satisfied they are than how they’re paid relative to market, according to research by PayScale.

UK defined contribution pensions should pool to harness illiquidity premium
Schroders, 8 November

Greater pooling of the UK’s Defined Contribution (DC) pensions could help schemes access more illiquid assets, enabling members to potentially benefit from improved retirement outcomes, a Schroders-sponsored study by the Pensions Policy Institute (PPI) has found.

Gig workers missing out on up to £75,000 in pension savings as auto-enrolment bypasses gig economy
Zurich, 8 November

Gig economy workers could boost the size of their pension pot by up to £75,000 if a form of auto-enrolment were extended to cover all workers, according to research by the Pensions Policy Institute for Zurich.

‘We’ll never have it so good in retirement’ - say people counting down to giving up work
Prudential, 10 November

Pension savers in their final years of work are concerned that they won’t be able to match the living standards of those who have already retired and admit to being jealous of their pensions and their lifestyles, according to new research from Prudential.

Workplace bullying, violence are risk factors for type 2 diabetes, new research reveals
Science Daily, 13 November 

Workplace bullying and violence may increase the risk of type 2 diabetes, for both men and women, according to new research.

Radical change needed to tackle ‘unemployment trap’ leaving over a million over 50s out of work
Centre for Ageing Better, 14 November

A new report calls for a radical rethink to tackle chronic worklessness experienced by the over 50s, with data showing this age group experience an ‘unemployment trap’ – they are more likely to be out of work than younger age groups, and once unemployed they struggle more than younger jobseekers to get back into employment.

Would you make an important personal financial decision based on a Google search?
Capita Employee Benefits, 16 November

Martin Laws, Senior Reward and Benefits Consultant discusses financial education and the HRD's role in wellness drawing upon the link between financial stress and workplace performance.

75% are not planning to introduce a Lisa
Employee Benefits, 23 November

Three-quarters of respondents (75%) are not planning to introduce the Lifetime individual savings account (Lisa) as a workplace savings tool, according to research by Employee Benefits and Nest

New inquiry launched into “defined ambition” pension schemes
Work and Pensions Committee, 24 November

Collective Defined Contribution (CDC) pension schemes are a new – to Britain at least – type of retirement saving plan with the potential to address some of the concerns that policy makers and the public have about the current pension "offer". They are commonplace in the Netherlands, Canada and Denmark but are not yet allowed in the UK.

Older people spending more time in ill health as health inequalities increase
International Longevity Centre, 24 November

Older people are spending an increasing number of retirement years living in poor health, according to new research from the International Longevity Centre-UK (ILC-UK). Inequalities in life expectancy by local authority have been increasing whilst the growth in pensioner income has been stalling.

Radical rethink required as the over 50s underestimate life expectancy by up to 8 years
Retirement Advantage, 27 November

Men approaching retirement age underestimating life expectancy by average of 6 years; women underestimating by average of 8 years

'Third of mothers' experience mental health issues
BBC, 28 November

More than a third of mothers have experienced mental health issues related to parenthood, according to an online survey of 1,800 British parents by the BBC Radio 5 live and YouGov.

39% do not offer an alternative to contributions for staff who reach allowance limits
Employee Benefits, 29 November

Over one-third of respondents (39%) do not offer an alternative to pension contributions for staff who reach their annual or lifetime allowance limits, according to research by Employee Benefits and Nest.

ACA survey says upwards of 12 million workers are not eligible for AE
Association of Consulting Actuaries, 29 November

The latest results published by the Association of Consulting Actuaries (ACA) in the final report of this year’s ACA 2017 Pension Trends Survey confirm that over 40% of employees in smaller firms are being ruled not eligible for auto-enrolment into a workplace pension.

Strategy seeks one million more disabled people in work by 2027
Department for Work and Pensions, Department of Health, 30 November

Ambitious plans aimed to get one million more disabled people in work over the next 10 years have been set out today (30 November) by ministers.

Department of Work and Pensions launches consultation on master trust pension schemes
Department for Work and Pensions, 30 November  

Master trust pension schemes will need to meet 5 key tests in order to continue operating, under new regulations confirmed by the government.

About the author

Katri Tuomainen Research and Engagement Executive

Katri Tuomainen

Insight Research

Our research reports are aimed at Pension Trustees and HR Directors, covering topics such as pensions, health, flexible benefits, engagement and wellness. They are free to download!

Find out more

Pensions & Retirement 2017

Our new report focuses on employee attitudes to pensions and retirement - the barriers stopping people saving and how employers can help them.

Read more

Contact round up team

If you would like to get in touch about any of the topics covered in this roundup, you can contact our team directly.

Get in touch