Why we need to get past old ideas of retirement

Jo Faragher

We’ve known for some time now that the demographics of the workforce are changing drastically. As the state pension age increases year on year, and since the abolition of the default retirement age in 2011, workers are staying with their employers for much longer than they used to.

Procorre’s analysis of Companies House data bears this out, finding that over one million company directors in the UK are now aged over 65, and more than half a million businesses have a director over the ‘traditional’ retirement age.

What is interesting is how many of these older workers are entrepreneurs or bosses of small businesses. Often facing age discrimination or unconscious prejudice in a large corporate environment, older individuals often seek out alternatives that can offer them greater flexibility and the chance to be their own boss.

Procorre found that there are 428,000 self-employed workers over the age of 65%, almost a tenth of the UK’s total self-employed workforce. Its research also suggests that women who took a career break while their children were young are devoting themselves to their careers at a later stage, hence a rise in senior female directors.

As the company points out, technological advances and the ability to work flexibly play their part in this, meaning workers can operate from home and maintain a work-life balance without the demands of a grueling commute or the long-hours that were perhaps expected of them earlier on in their career.

Another survey supports this view. Research from pensions company Aegon earlier this month found that a quarter of UK workers wanted their employer to create a flexible role to help them work into retirement, with three in five UK workers planning to carry on working if they haven’t saved enough to retire at their ‘target’ age.

Angela Seymour Jackson, MD of workplace pensions at the company, commented: “With so many expecting to work on past traditional retirement age on more flexible contracts, employers will need to move quickly to accommodate this new later-life work culture.”

Where employers don’t offer this flexibility, they should not be surprised to see workers approaching their mid-60s looking for alternatives and even branching out on their own. For businesses this could be a real loss of knowledge, experience and skill, so it’s important to weigh up that risk.