Two new surveys have revealed the ongoing impact of the cost-of-living crisis on people heading towards retirement.

According to research by Scottish Widows, some 15 per cent of men and 16 per cent of women have reduced pension contributions to cope with rising prices. Scottish Widows calculates that – for someone aged 40 cutting back on their retirement savings by £150 per month for a year would mean £3,000 less in their pension pot by the time they retire.

Moreover, by stopping or reducing workplace contributions, you can miss out on employer contributions as well.

Meanwhile, according to a new report from Working Wise and sponsored by Santander Consumer Finance, almost one-third (30 per cent) of workers over the age of 45 feel they no longer have enough income to cover basic living costs, while 46 per cent of older workers are having to change their retirement plans to fund growing bills, 10 per cent of workers have come out of retirement and 26 per cent of those who have already retired say they may need to return.

This is despite two thirds (66 per cent) of older workers harbouring a real desire to reduce their hours or retire completely – and one third (34 per cent) of them wanting to retire early for health reasons.

Mandy Garner, a spokesperson for workingwise.co.uk, said: “For many older workers, they are stuck between a rock and a hard place, unable to retire but unable to pay the bills in their current roles. If we want to engage older workers and encourage them to stay in or return to the workplace, we need to understand their needs; flexible working is crucial, largely owing to health issues and caring responsibilities.

“We need to appreciate older workers, show them we value them and create a working environment that enables them to thrive and keep growing. Otherwise, they will jump ship.”

Garner added: “We need to tackle ageism head-on. Starting with job adverts – which are preventing many talented older workers from even applying in the first place. We need to arm interviewees and recruiters with the knowledge to prevent ageism in the hiring process and to embrace older workers into the team.”

Catherine Foot, director of longevity thinktank Phoenix Insights, said: “With a third of the workforce already over 50 and this proportion set to continue to grow, it’s crucial that businesses are tackling age discrimination and providing the necessary support to enable employees to stay in work as long as they need to.

“Recruitment, development, reskilling and retention of older workers, along with policies aimed to support flexible working, are vital in achieving this. There is much more that needs to be done by employers and the government to reimagine the workplace as people live and work for longer and we’d encourage all employers to consider initiatives that can really make a difference.”

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