Mandatory retirement opposed worldwide

May 11 2005 by Brian Amble Print This Article

For many people in the developed world, traditional retirement is a thing of the past. A new global survey suggests that eight out of 10 want to scrap mandatory retirement while just 14 per cent equate financial independence with old age.

According to research carried out for HSBC bank, most people want to spend their later years involved in a mix of work, leisure and education rather than in passive retirement.

But it also revealed a growing awareness of the potential financial problems that could be faced in retirement.

The survey looked at attitudes towards attitudes to ageing and retirement amongst 11,000 people in the U.S., China, Hong Kong, Brazil, Canada, India, Mexico, the U.K., Japan and France, 10 countries which together make up more than half of the world's population.

Alternating work and leisure was seen by the majority as the ideal later lifestyle

In six of the 10 societies surveyed, alternating work and leisure was seen by the majority as the ideal 'later lifestyle' - already a major shift away from the notion that later life is dominated by a passive retirement.

Even in India and the UK, the most sceptical about flexible work arrangements, more than a quarter want to take on some work in their later years.

The research also highlighted that people want greater choice in when and how they retire.

Just 17 per cent felt employers should have a mandatory retirement age while 80 per cent felt that people should have the right to go on working as long as they wanted to.

In the UK, nine out of 10 were opposed to a mandatory retirement age and more than three-quarters of those surveyed (77 per cent) said they would work in retirement.

But when people expect to retire from their main occupations remains relatively constant. The research shows that, globally, the average retirement age was 58 in 2004. But those not yet retired also said that they expect to retire at 59 on average.

In none of the surveyed societies did a majority equate retirement with old age.

Only 29 per cent thought avoiding stress was important to a happy later life. Fewer than a quarter (21 per cent) said that never working for pay again would form part of their ideal retirement.

But with the funding of retirement becoming an increasing problem, the survey also asked how societies should address the economic costs of their ageing populations.

Given the choice between increasing taxes, reducing pensions or raising the retirement age to ease this burden, almost half (45 per cent) favoured raising the retirement age while only a quarter said they would accept higher taxes. Some 16 per cent said they wanted lower pensions.

Sir John Bond, Group Chairman of HSBC Holdings plc, said that the ageing of the 'baby boomer' generation, declining fertility rates and increasing lifespans were all combining to create new and complex demographic pressures across the globe.

"The resulting changes will in many cases be very positive but they also create real challenges, not least with regard to the funding of retirement.

"Even in Canada, the nation our research found to be the best prepared for retirement, just 24 per cent now equate later life with financial independence."

I was also clear, he argued, that there is now a broad acceptance that we will have no choice but to retire later to ease the burden on pensions and taxation.

"But people are not simply expecting to work longer, now they want to mix work and leisure, learning and rest," he added.

"It is critical that governments, regulators, corporations and financial institutions understand these emerging trends in behaviour and attitude if we are to successfully tackle the pressing issues before us."