Reinforce financial wellbeing support for your experienced workforce

An ageing workforce means employers must be prepared to step up their support of older, experienced workers.

Over the past few decades there has been a demographic shift in the workplace resulting in what we today refer to as the ageing workforce. For most of us this change has been so gradual that it’s difficult to imagine a different environment.

The Office for National Statistics (ONS) reported in 2018 that there were more than 10 million people aged over 50 in employment, with over 50s making up nearly one third (31%) of the entire UK workforce.

This is up from around one in five (21%) in the early 90s. These figures seem to be trending in only one direction as UK HR leaders are having to adapt how they approach talent management and employee benefits strategies.

Drivers behind the shift

As is often the case, an understanding of the main drivers behind this phenomenon should help shape solutions to the challenges faced by employers in the current landscape, and ultimately explain why a particular focus on financial wellbeing is so important.

Recent technological advances, a drop in fertility rates, a change in social attitudes, and financial necessity in response to challenging living standards are some of the main factors that have all combined to form the prefect storm of creating an ageing workforce.

The cost-of-living effect

Last year the ONS reported an ever-decreasing trend in UK fertility rates. Babies born to women in England and Wales in 2023 were fewer than in any year since 1977, and this decline is most dramatic in the 20-24 and 25–29-year-old age groups.

Studies from University College London (UCL) show financial and work-related pressures are the main reasons that people aren’t actively trying to have as many children.

Furthermore, AI and other technological advances mean that many entry-level jobs today are automated, creating an obstacle to those looking to enter the workplace in the traditional way. On top of this, a large proportion of Gen Z prioritises flexible working and a purpose-driven career over rigid workplace structures.

For this generation, today’s smart-technology makes entrepreneurial opportunities more of an alluring reality than ever before, and traditional workplaces are constantly having to adapt to stay competitive in the jobs market.

Older workers and retirement

At the other end of the age-spectrum, we find that those who were already deep into their careers by the time society were producing fewer babies. Many older workers who were on a path to retire at a certain age have had to reconsider their options.

Barnett Waddingham’s research shows that more than one third (34%) of employees surveyed who are older than 55 have already, or are considering to, delay retirement due to financial concerns. 12% of those in the same age band have also had to return to work post-retirement (or are planning to return to work) for financial reasons.

The fact that fewer young people are entering the workplace and more of the older generation are planning to work longer has caused organisations to shift their people strategies - from focusing on recruitment to putting more weight on retention.

Why financial wellbeing is key

Many organisations have spent a lot of time shaping their flexible and hybrid working policies to accommodate changes in employee expectations and mental and physical wellbeing programmes, but there seems to be room still to expand what is being done in the financial wellbeing space.

This will be crucial over the next few years as financial wellbeing appears to be at the heart of much of what caused the demographic imbalance in the first place.

Within this space, we anticipate a move away from surface-level initiatives to providing real support for those nearing retirement, both in terms of education around retirement options and planning for real life eventualities in-retirement.

As for changes to the workplace, employers should be prepared to provide well thought out support for older, experienced workers by way of mentorship programmes and a positive change in attitude towards contract and part-time workers, as many in the older generations are looking to go this route.

In addition, employers should be aware that those workers in the sandwich generation – generally aged 40-60 – are often required to financially support both their own children and older relatives and this might exacerbate financial stress, a challenge they find more difficult to talk about than say Gen Z.