Lower wage growth could have a significant impact to a number of people’s retirement plans, as it has led to smaller pension contributions(1). As a result there has been a gap in ‘real earnings’, affecting the current living standards of many people.
Why? As salaries have not increased, neither have the size of pension contributions, leaving a 13% hole in the pension pot at retirement of the average UK worker. What this means is that those approaching retirement may need to work for an extra two years to make up the shortfall, or accept a lower standard of living post retirement.
Employers are looking at an increasingly older workforce because of this, however it seems that there is a common misconception with what this brings; 46% of employers think an employee’s work performance declines with age, whereas they can actually bring experience, knowledge and loyalty to a business.
That’s not to say all employers think this, as 59% consider older workers an integral part of the business. Even so, they are not always offering development opportunities to maximise the benefits older employees can bring to the workforce, according to recent studies(2).
For example, only 14% of under-50s said that they hadn’t had an opportunity to learn new things and develop in the last year; this rises to 27% when the over-50s are asked the same question. Following on from this, only 25% of employees over the age of 50 had been on a training course in the last six months, compared with almost 29% of under-50s.
Employee Benefits are also something to consider when trying to accommodate older and younger employees – those who are younger may see the appeal of childcare vouchers or perhaps a Health Cash plan to pay for everyday medical expenses, whereas an older workforce may prefer the security of Private Medical Insurance or an Income Protection policy.
One thing I have found in this line of work is that every business is unique, and there is no secret formula to creating the perfect employee benefits package - the key is effectively communicating between both the employee and the employer to ensure that ‘everyone benefits’.