As new life expectancy figures renew calls for employees to work longer
before retiring, accountants are better placed that most to understand the
financial implications of an ageing population.
hitting the high notes?
Overcoming the (edible)
obstacles of work
The £37bn pensions shortfall across the UK’s 100 largest companies is just
the tip of the iceberg, as organisations across the UK grapple with the true
cost of a pensions deficit showing little sign of abating.
So it’s interesting that such a high proportion respondents to the latest
Accountancy Age/Robert Half Finance and Accounting salary and benefits survey
are adamant that they want to take early retirement.
The survey of 2,232 Accountancy Age readers found that two third of
respondents want to retire by the time they reach 60, and more than one quarter
of accountants have earmarked 50 to 55 as the age when they’d like to hang up
their trusty calculator.
But games of fantasy retirement aside, accountants are, on the whole, a
pretty grounded and down-to-earth bunch. So given the gloomy pensions outlook,
it perhaps comes a little surprising that a slightly lower proportion – 61% –
actually believe that they will be able to retire at their ideal retirement age.
Interestingly, finance directors in the sample were by far the most confident
that they would be able to hit their retirement target.
Perhaps that has something to do with the fact that, on average, they’re
earning more than anyone else and have more reason to feel in control of their
destiny. Putting aside the disparity between dreams and reality, what is obvious
is just how few respondents see themselves sticking around in the job longer
than 65 – just 6%, according to this survey.
But nor do many accountants think that the statutory retirement age should be
extended to 67 – almost three quarters to be precise – despite this being the
most likely and practical answer to the pensions shortfall dilemma.
Only last week the government won the backing of trade unions for a plan to
raise the retirement age from 60 to 65 for new recruits to public sector pension
schemes covering civil servants, NHS staff and teachers.
There’s good reason why accountants, of all people, might have a slightly
more hopeful outlook when it comes to the possibility of early retirement. For
one thing, pensions are still top of the pile when it comes to staff benefits.
Accountants, presumably, feel well placed to ‘cash in’ early because they’ve
done a pretty good job of making sure they’ll be well provided for in later
But there could also be a more sinister reason lurking behind the survey’s
top line figures – ageism. A staggering 60% of respondents believe the
profession discriminates against those in the 50+ age group.
Even younger accountants appear concerned about inherent prejudice in both
business and practice once accountants hit the magic (or not so magic)
five-zero, with 38% of accountants under 25 flagging up discrimination against
their colleagues aged 50 and above. That proportion rises steadily according to
respondents’ age. Among those accountants in the 56+ age bracket, almost four
out of five admit they’re concerned about age discrimination.
The fact that 17% of respondents don’t see themselves working in accountancy
or finance until they retire, could add clout to suggestions of inherent age
discrimination, just as it could point to aspirations for a broader business
role or a sideways step in business.
In their defence, most organisations don’t set out to knowingly discriminate
on age grounds, but the fact remains that between 13% and 27% of organisations
admit to using age as a selection criteria, with one in eight specifying age
limits or ranges in recruitment adverts, according to the Chartered Institute of
Personnel and Development.
But whether accidental or deliberate, there are some pretty compelling
reasons why it makes sense for business to stamp out ageism – not least the
introduction in October next year of new laws that will make it illegal for
employers to let age prejudice influence employment policies and practices.
Ironically, in the UK at least, it seems as if legislation designed to combat
age discrimination will have exactly the opposite effect to the one intended. A
poll by the Employers Forum on Age last week found that employers are sceptical
about the likely impact of the new discrimination laws – more than 60% thought
that rather than encouraging organisations to keep people on after 65, the
regulations will only lead to them retiring everyone at that age to avoid
But legislation aside, extending the retirement age of employees can save
significant recruitment and training costs, while, at the same time, allowing
the business to retain valuable knowledge and helping to present an outward
image that can appeal to older customers and capture an bigger share of a
growing market with a huge disposable income.
Other research suggests that the majority of us would be happy to keep
working after the current retirement age if we could do so flexibly. Could it be
that the long-hours culture across the profession, and widespread reluctance on
the part of employers to embrace more flexible ways of working, is leaving too
many in the profession with little choice but to take the money and run.
More than just an issue for those nearing retirement age, this age-old
problem raises no end of questions about the message it sends out to the next
generation of accountants, on which the industry depends for future success.
Succession planning is a concern for most smaller practices, and all
accountants in business and practice are kidding themselves if they don’t think
attracting talent isn’t a huge priority. Inspiring tomorrow’s accountants – who
may not have the luxury of deciding when they retire – certainly isn’t something
we can leave off worrying about until tomorrow. ‘