Retirement alert as early exit from work can 'damage financial resilience'

PEOPLE approaching retirement have been warned that an early exit from the workforce can damage people’s finances and cause knock-on effects.

Angellica Bell speaks to carer about retirement planning

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Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Leaving the workforce early can have an enormous effect on someone’s financial resilience in retirement as well as their physical and mental wellbeing.”

These comments come after new ONS data on the impact of homeworking on older workers have been published.

The data show that working from home can help people delay their retirement, but there is uncertainty over whether this will continue post-pandemic.

The ONS report said the early exit of over-50s from the workforce “can negatively impact an individual’s future financial security and is also detrimental to the wider economy.”

Elderly workers have long yearned for more flexible work and a Saga poll in 2018 found that 78 percent of workers over-50 said workplaces would be more welcoming if they introduced such arrangements.

Ms Morrissey said: “Anything that enables people to stay in work for longer and benefit from increased income and pension contributions is welcome.

Retirement alert

Retirement alert as early exit from work can ‘damage financial resilience’ (Image: Getty)

“This data shows that the shift to working from home has had a positive effect on older workers in terms of their health and work-life balance.

“Not having to commute to an office every day frees up time and can also mean you are less exposed to illness. It can mean people are able to work longer than they otherwise would have.”

She also added that the increased flexibility will be especially welcome for women who often have to juggle work with caring responsibilities.

“However, it remains to be seen if working from home will remain the norm as we emerge from the pandemic”, she said.

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The new data is not the first to show that flexible working is a factor in enabling older people to continue in the labour market for longer.

It also found that the typical characteristics of those who exit work early and those who didn’t transition to home-working were similar.

“They tend to have poorer health, lower well-being, live in deprived areas and have lower or no qualifications”, the ONS report said.

The ONS data showed a gender disparity in retirement age.

Strikingly, one thing held true across all ages.

Those who mainly or entirely work from home had lower absences due to sickness than those who work from home less frequently, or never.

Retirement warning

It remains to be seen whether flexible working will be available to elderly workers post-pandemic (Image: Getty)

At age 50, 17.9 percent of women were economically inactive.

This compares to 9.6 percent of men.

This discrepancy narrowed but didn’t go away and by the time people reach 64, 58.6 percent of women were economically inactive compared to 44.9 percent of men.

William Murphy

William Murphy

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