Employment News

News added on 21.01.2019

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Retirement

Helping employees to avoid a “cliff edge” retirement

According to a new survey, nearly half of UK workers approaching retirement would prefer a gradual retirement rather than having to suddenly stop working altogether. What can you do to help your older employees wind down and so avoid a “cliff edge” retirement?

The survey, conducted by insurance company Aegon in conjunction with Opinium, polled over 1,000 workers all over the age of 50 and earning more than £20,000 per annum. 49% reported that they would like a “pre-retirement” transition period before they eventually give up work altogether. Of those, 70% said they would ideally like to work fewer days a week and 44% said they would like to work fewer hours in a day. 33% wanted more flexible working arrangements. Only 31% said they would rather just go straight to full retirement in the traditional way.

Allowing workers to retire gradually can have benefits for you as well as for them. It enables you to mitigate the effects of losing long-serving, senior employees who have a wealth of knowledge. Instead, they can help to mentor other younger staff to develop their skills, knowledge and expertise, in particularly to train others to fulfil their job role. Alternatively, the worker could move into a slightly different role to undertake part-time work as they approach retirement, enabling you to use their skills in different ways.

As the law stands, all employees who have worked for you for at least 26 weeks have a statutory right to request flexible working and you must deal with their requests “in a reasonable manner”. This includes assessing the advantages and disadvantages of the application, holding a meeting to discuss the request with the employee and offering an appeal process if the application is declined. However, you can refuse an application if you have a good business reason for doing so (there are eight permitted business reasons for refusal set out in the legislation, e.g. the burden of additional costs, detrimental effect on ability to meet customer demand, inability to reorganise work among existing staff, inability to recruit additional staff and detrimental impact on quality or performance). An employee can apply for a phased retirement, e.g. to reduce their hours and work part time, through the statutory flexible working procedure. If you agree to their request, you should write to them with a statement of the agreed changes and a start date for flexible working. You should also change the employee’s employment contract to include the amended terms and conditions.

You can encourage employees who are approaching retirement to apply for flexible working. This will normally involve an agreement to reduce their working hours per day or working days per week, but it could also mean considering alternative, less pressured roles.

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