Research Report: Retirement Strategy – Does Your Company Have One, Does It Need One?

The question of retirement – when people expect to retire, how they fund their retirement, and how companies manage the process – is a subject that has been discussed by executives, commentators, and policy makers for many years. ‘The demographic timebomb’, ‘the retirement income crisis’, ‘the longevity problem’ and ‘global greying’ are some of the terms used when discussing the numerous challenges brought about by the ageing of populations across the world. As countries’ demographic profiles have changed, so has the conversation about what it means to retire, when people should do so, and what counts as an ‘older worker’. For much of this time, the imperative to answer these questions has seemed some way ahead. No longer. The 2020s is the decade during which the challenge of an ageing population shifts from tomorrow’s problem to today’s.

PARC last looked at this broad topic in 2016. We noted the OECD’s warning that a dramatic global shift towards private ‘retirement-saving’ plans had transferred significant risks from the state and employers to individuals. We concluded that governments, employers, and employees may be “sleepwalking into a crisis”.

Re-visiting the question in 2022, we find many similar themes – but which have now become more acute. Beyond the factors we identified in 2016, a number of developments have increased the urgency and magnitude of the problems we highlighted as follows.

• Climate change and the shift to Carbon Net Zero
• Spending during the Covid pandemic
• The fear of the next wave of the Covid pandemic
• Low GDP growth
• The ageing of working populations

If the factors intensifying the retirement income crisis have become more acute over the past six years, what of the other side of the equation? In this report, we aim to help redress the balance.