Too Young to Retire, Too Old to Hire?

We're being encouraged to work for longer.

State Pension age is rising, people are living and working longer and the traditional idea that everyone simply retires at 65 has gone.

But are our workplaces keeping up?

Because there seems to be a contradiction.

We're expecting people to remain economically active for longer, yet people in their 50s and 60s can find it difficult to get back into work if they lose their job or decide to make a move.

And for employers, there's another question.

What happens when someone reaches the age at which we traditionally expected them to retire... and they don't want to?

Reaching pension age doesn't mean someone has to retire

For most jobs in the UK, there is no compulsory retirement age.

Someone can reach State Pension age and simply carry on working. As an employer, you can't assume that because someone has reached a certain age, it's time for them to leave.

So perhaps we need to change the conversation.

Rather than asking 'When are you planning to retire?', Acas recommends having regular conversations with employees of all ages about their future plans and aims.

What would you like the next few years of your career to look like?

Because the answer could be very different from what we assume.

Someone in their 60s might want to continue full time for another ten years. Someone else might want fewer hours or less responsibility. Another might want a completely new challenge, while someone else may love the idea of mentoring and passing their knowledge on.

Age doesn't tell us what somebody wants from their career. And it shouldn't determine whether they're offered training, development or progression either.

Equally, if there are genuine performance or capability concerns, those should be managed properly and consistently, just as they would be with any other employee. Waiting for someone to retire isn't a performance management strategy.

But what happens if you need to find another job later in life?

This is the other side of the conversation.

Latest Government figures show around 866,000 people aged 50 to 64 are either actively looking for work or are economically inactive but would like to work.

Employment among 65-year-olds has increased considerably too, from 28.2% in 2016 to 46.6% in 2026.

People are working longer. But if someone finds themselves looking for a job in their 50s or 60s, are we always looking at their experience objectively?

Or do assumptions creep in?

Will they be too expensive? Are they overqualified? Will they stay? Will they want to report to somebody younger?

Perhaps the simplest answer is to stop assuming and ask the person.

What about opportunities for younger people?

This is where the conversation gets particularly interesting.

We also know younger people can struggle to get that first opportunity, and there have been suggestions in the wider debate that earlier retirement could create more space for younger workers.

But I don't think it's quite that simple.

A 65-year-old engineer retiring doesn't automatically create a suitable opportunity for a 20-year-old without the skills and experience required to replace them.

Perhaps we need to stop thinking about this as older workers versus younger workers.

Could we be doing more to bring the two together?

·       An experienced engineer mentoring an apprentice.

·       A senior employee gradually reducing their hours while someone else develops into their role.

·       Someone with decades of customer, technical or business knowledge actively passing that experience on rather than it simply walking out of the door when they eventually retire.

That could create opportunities for younger people while keeping valuable knowledge inside the business.

Retirement is becoming much more individual

There's a financial side to this too. People can continue working after State Pension age and claim their State Pension while they do so. State Pension is taxable income alongside other taxable income, so continuing to work can affect the amount of Income Tax someone pays.

But money is only one part of the decision.

Some people need to keep working. Some genuinely want to. Others would like to gradually reduce their hours rather than stop overnight.

We shouldn't assume which applies simply because we know somebody's age.

Perhaps it's time for a different conversation

For SMEs, I don't think this needs another complicated HR process. It needs good conversations and some forward planning.

What do your people want from the next few years? Who holds knowledge that needs to be shared? Who wants to develop? Who might eventually want different hours or responsibilities?

Those conversations can help with succession planning while also giving employees much more choice over the later stages of their careers.

Because if we're going to ask people to work for longer, surely we also need to be prepared to employ people for longer.

So perhaps instead of asking 'When are you planning to retire?', we should be asking:

What do you want the next stage of your career to look like, and how can we plan for it together?

That feels like a much better place to start.