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Employee Benefits News

Latest News
03 Nov 2014

Rising Working Age Pushing Up Group Risk And Health Costs

With people working for longer and the average employee age rising, new research suggests a link between average workforce age and insurance cost for group life assurance cover and private medical insurance, Money Marketing recently reported.

Furthermore, it was predicted that group income protection premiums will rise by 50% when the average employee age rises by just five years. A change in average age from 35 to 40 could lead to a 40% increase in premium costs for group life, with this figure continuing to increase alongside the organisation´s average age.

This would mean that an average age rise from 40 to 45 could result in a 50% premium increase, with a 60% increase if the average age were to rise from 45 to 50.

The number of older people in work has been steadily increasing over the last few years. Figures from the Office for National Statistics (ONS) show that at the end of 2011, just over 870,000 people over the age of 65 were in employment.

However, by the middle of this year this number had increased to 1.1 million workers over the age of 65; and the ONS predicts that this could reach nearly two million in the next six years.

With 23% of UK employees expecting to work at least until the age of 70, according to the research, the average age of the workforce is rising in many companies. According to experts, organisations will need to be prepared for the additional liabilities and costs that this shift is likely to bring.

In addition to this, employees should be educated early on about how to achieve their desired retirement income – this could also help to reduce a company´s own costs.

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