More people are working longer, while navigating a changing landscape impacted by technology and the gig economy of casual, short term jobs and self-employment.
What does this mean for New Zealanders when it comes to preparing for retirement? And when does work stop and retirement begin?
Where we are, and where we’re heading
Already, one third of New Zealand’s workforce is aged 55+.
And New Zealand has one of the highest rates of people aged 65+ still working – 24%. This compares to the UK rate of 10%, Australia 12%, USA 19%, Japan 20% and Iceland 35%.
Among New Zealanders aged 65-69, 44% still have jobs.
The number of people aged 65+ still working will increase as our population ages. Today, there are 756,000 or 15% of the population in that age group. By 2038 that number is projected to grow to 1.34 million - 21% -and one in three will still be working.
They contribute to the economy through taxes and buying power, but is it fair that that people aged 65+ who are still working get the full rate of NZ Super, no matter how much they earn?
Especially when the cost of Super will balloon from $39 million a day now to $115 million a day in 20 years?
Meanwhile, the number of workers younger than 65 will continue to decline, from 4:1 today to 2:1 in 20 years.
The skill shortage and ageism
In a CFFC survey of 500 companies, 33% were worried about the impact on their business of the ageing workforce, with many already experiencing skill shortages. Yet 80% had no specific strategies or policies to recruit or retain workers aged 50+, and 65% agreed that older workers can face barriers to being hired because of age.
Ageism is a problem. Many workers in their 50s and 60s struggle to find jobs when they want or need to change roles. Yet most employers in the CFFC survey had a positive attitude towards older workers, with 55% finding them no more or less resistant to change than other age groups, and 70% saying they were no more likely to have high absenteeism or sick leave. 65% agreed businesses should take extra steps to attract and retain older workers, viewing them as an “untapped resource”.
The gig economy
At the same time as the workforce is ageing, the nature of work is changing. Technology and automation mean some jobs are disappearing while new roles are created. Older workers need retraining to help them transition and meet employer demand for these new skills.
But when people were asked if there were enough training opportunities for people over 50, only 17% said yes.
The developing gig economy is more open to people being self-employed or jumping between short-term contracts – 1 in 20 employed New Zealanders are now contractors, 1 in 10 have more than one job, and only 38% of employees have been in the same job for five or more years.
What does this mean for their long-term retirement savings? KiwiSaver was designed to be a workplace savings scheme, with employer contributions of a minimum of 3% topping up those of the employee, and a government contribution of up to $521 a year if an employee puts in $1043. Gig workers miss out on the employer contribution and need to be disciplined to save for themselves. Are they at a disadvantage, and is this fair?
Tell us what you think
The issues of an ageing workforce and the changing nature or work flow through to how well-prepared New Zealanders will be for retirement, what age ‘retirement’ should be considered to start, and what that might mean for NZ Super. That’s why we’re studying them as part of the 2019 Review of Retirement Income Policies.
We’re getting new research done to inform our recommendations to government and will post results here as they come in.
We also want to hear from individual New Zealanders. Tell us what you think should change to ensure we all have a good standard of living as we age, both now and in the future.