Recession 'sees retirement rethink'

A new global survey from Aon Consulting has shown that two-thirds of workers think they will have to delay their retirement plans because of the recession.

About 64% of people said they thought they would now have to work for longer than they had planned, with 19% expecting to have to work for an extra six to nine years.

“People are having to rethink when they will retire because the credit crunch has caused steep falls in global stock markets, hitting the value of people's pension pots,” says Carel Smith executive head of retirement funding at Aon South Africa.

Smith says that Aon estimates that, despite the recent stock market rally, the value of defined contribution pensions, under which the individual shoulders the risk of stock market volatility, are still 12% lower than in September 2007.

“Having an older workforce could have serious knock-on effects for employers such as increased salary costs,” says Smith. He did however note that there would also be benefits to retraining more experienced workers.

There has to be a real discussion in this country about the value older workers bring to the economy, and a shift in the thinking that we have to retire at a certain pre-conceived age. Already governments around the world are shifting the retirement age to later in life to reflect increasing levels of longevity, but employers need to match this with a positive attitude to workers older than the current retirement age," concludes Smith.

The survey was based on the responses of 4,046 people.