Many of us are looking to remain economically active into our 60s and 70s, and the UK urgently needs this labour and skill pool. But are employers doing enough to enable that to happen? By Tony Watts OBE

For some time now, a casual observer might conclude that, when it comes to people remaining in work for as long as they need or want to, the stars were aligned.

According to a new report from Canada Life, almost eight out of 10 UK adults (79%) believe that they will have to work for longer – not least because the funds they need for a secure retirement have not materialised, or because the cost of living has risen beyond their expectations.

They should be pushing at an open door. In 2024, the British Chamber of Commerce reported that 62% of organisations were experiencing a skill shortage.

The Default Retirement Age is (thankfully) also a dim and distant memory.

Moreover, while there are fewer younger people entering the workplace, a rapidly growing cohort of older people is now available to carry on working. What could go wrong?

Well, quite a lot really. There are currently around half a million “involuntary workless” in the UK:  people aged 50 to 64 who would like to be working but aren’t. If you pushed that age limit up to 75, many more fit and able people would be added to that number.

The Government has even mentioned older workers in their plans to “Get Britain Working”, recognising the need for their skills in the future workplace and even promising strategies to make that happen –– including addressing entrenched ageism in recruitment and retention.

Marrying supply with demand

But what is happening on the ground right now? Clearly not enough if so many people who want to work can’t find employment. And how many are doing jobs that are well below their skills level, simply because the computer at the recruitment agency said “no”?

The new report from Canada Life sheds some light on the problem, starting off by prognosticating that, by 2030, more than half of the UK workforce will be aged 50 or older – between them contributing an estimated £730 billion to the economy.

It also found that almost a third (30%) of UK employers recognise that an ageing workforce is a “risk” to their business over the next five years… because they have not yet adapted to the evolving situation.

Indeed, while 83% of UK employers believe people will need to work longer to support themselves in later life, only 12% private sector employers have future-proofed their businesses by having a strategy in place to recruit and retain older workers.

So what does that “future proofing” look like?

The Canada Life report identifies the supportive measures that employers can harness, acknowledging that many of them do have at least one of them in place, such as:

• promoting a good work life balance (41%);
• valuing skills and expertise alongside formal qualifications (29%);
• and supporting flexible working for those with caring responsibilities (25%).

On the plus side, employers also recognise that they have an important role to play in helping employees and workplaces adapt to longevity.

This includes:

• investing in skills development throughout employees’ lives (72%);
• being mindful of how motivations shift with age (70%); and
• thinking differently about workplace structures (65%).

Three quarters (73%) of employers also believe that it’s not just down to them to make the dots join up, and that the government itself will need to take a more active role in helping people work for longer.

Do employers really understand their employees?

Worryingly, the research also highlights a disconnect between employers’ views on working in later life and those of the their employees. For example, 55% of employers believe employees who leave the workforce early do so because they physically can’t do the work. In fact, only 18% of employees say this is the reason.

This suggests that there is scope for employers to be talking to their staff at different stages of their career journeys – the concept of a “Midlife Review” is now well established, but still not commonly practised.

That sort of discussion opens the door for employees to shift roles rather than abruptly drop out of the workplace should they, for example, take on carer responsibilities, develop long-term health conditions or simply want to work fewer hours. It also allows employers to retain experienced people to act as mentors… and opens the path to promoting talented younger people rather than losing them to rival companies.

Recognising why someone wants to remain in work should also be part of that conversation: only a quarter (25%) of individuals aged 65 or over who are still working are there through financial necessity while 42% want to stay mentally and physically active.

With almost eight out of 10 UK adults (79%) believing that they will have to work for longer, and not all of them willing or able to continue, a more agile future is almost certainly the answer. Some 42% of UK adults also agreed it was likely that they would need to rethink their retirement plans by retraining or pursuing multiple careers, should living longer become the norm.

A healthier future

While it would seem an obvious step for businesses to support the physical and mental wellbeing of their employees, only 38% of employers regard employee health and wellbeing as a high priority.

They could easily rectify this with benefits such as critical illness cover and income protection as they move through their working lives – often more important to an employee than a pay rise.

Canada Life’s Lindsey Rix-Broom concludes: “It is clear from our research that building longevity-ready workplaces requires collaboration and meaningful dialogue between individuals, employers, advisers and policymakers.

“Getting this right is not only a practical necessity – it is a moral imperative and a pathway to unlocking the growth and potential of the UK’s workforce and, by extension, the wider economy.

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