Insurers need to amend age limits

Many insurers still have life, critical illness and income protection policies that stop paying out or cease cover, at state retirement age. Many more refuse to accept new business from people over 60 or 65, or even younger. Urgent rethinks on both are needed.

Prudential has revealed that UK businesses are bracing themselves for a surge in staff looking to delay retirement with around 1.8 million people expected to be working beyond traditional retirement ages in just 10 years.

The findings from new research commissioned by Prudential among finance directors at UK businesses found 24% of companies expect staff to work beyond retirement age in the next 10 years, with the proportion of people in the workforce who are past traditional retirement ages expected to more than double to 1.8 million people.

Larger companies expect to see an even greater proportion of their workforce working beyond retirement, with 39% of finance directors at larger firms expecting to have to accommodate requests from staff to work longer.

UK companies anticipate this will mean around 6.3% of their workforce (equivalent to 1.8 million people across the UK working population) will be made up of people working beyond statutory retirement ages in 10 years, more than double the current proportion of 2.6% of company workers (equivalent to around 752,700 people) who currently work past retirement.

The study also found that in the past 12 months alone, 7% of finance directors have reported an increase in the number of employees asking to work past traditional retirement ages.

As health and longevity continue to improve and people look to fund a longer life in retirement, it is inevitable that people will work until later in life, even if it is part-time rather than full-time.

The statutory retirement age for men and women are due to rise to 68 by 2046, or even earlier if the Conservatives win the next election. So working longer will be a fact of life for those entering the workforce today but these findings suggest that increasing numbers of pensioners will be forced to work later far sooner than this.

Can anyone remember the days when computers were going to allow us all to retire early?

And what about the need for childcare as granny and granddad will no longer be available for free child minding, as they will be at work too?

Health insurance: Hot Topic: November 2009