How can HR help employees prepare for retirement?

Personal Career Management offer tailored Retirement Transitioning programmes.

Read the article by Freddie Clemo for People Management magazine here:

With many older workers ‘stuck in denial’ about leaving the workforce, businesses should take a more active role in supporting them with the transition.

Traditionally, retirement was a clear-cut milestone marking the end of someone’s working life. Now, as people live and work for longer, it has become a more complex transition, with many retirees returning to the workforce to take on part-time roles or freelance opportunities.

This shift has changed what it means to retire and, with more options available, many people feel underprepared for this new life stage. Fewer than half (41 per cent) of working people aged 60 to 69 feel ready for their retirement, according to research from financial services firm Just Group. “ People tend not to think too much about retirement until it comes up and smacks them in the face,” says Sarah Vickerstaff, emeritus professor of work and employment at the University of Kent. But by avoiding the topic entirely, many older workers risk becoming “retirement deniers”, she adds.

“Everyone’s going to retire eventually, so why don’t we talk about it?” Retirement can be a psychologically difficult and sensitive subject for people to discuss. However, this often prevents workers from making the necessary preparations. “For many people, work is a huge part of their identity.

Retirement can become quite an existential question, leading to this feeling of ‘if I’m retired, who am I now?’” says Corinne Mills, managing director of coaching business Personal Career Management. For those who have been in the workforce for decades, with a routine and structure, retirement can feel like a “huge new chapter to write”, she adds.

Similarly, concerns about ageism in the workforce can deter employees from bringing up the prospect of retirement with their manager. Some people worry this might cause them to lose out on opportunities for progression or end up pushed out of work before they feel ready. Many employers are also reluctant to raise the topic of retirement with their workforces, according to Vickerstaff, often for fear of breaching age discrimination legislation.

Redefining how we think of retirement

However, businesses have an important role to play in aiding with the transition into retirement. By reframing it as the start of a new chapter, rather than the end, employers can have more constructive conversations, Mills says. “It’s not just about the loss of that old life, it’s about creating a new one,” she explains.

Retirement for many people is no longer a “cliff edge”, she says, but more of a gradual transition, with many prospective retirees choosing to continue working under more flexible arrangements. In September 2023 there were 781,000 people aged 66 and older who were working part time – an increase of 18 per cent since 2021, according to analysis of ONS figures by Rest Less.

Deciding to continue to work in a reduced capacity can also have health benefits. Research from Bupa found so-called ‘un-retirees’ – those re- entering the workforce after retirement – have a stronger sense of purpose (36 per cent), improved wellbeing (26 per cent) and better physical health (19 per cent).

The importance of planning

HR professionals should make people aware of the other options available to them, such as part-time or consultancy work, well ahead of retirement. The closer you are to retirement, your room for maneuver reduces and the options available may be more limited, Vickerstaff warns.

By helping people plan in advance, employers can give staff a greater sense of control over the retirement process. This will not only help the organisation with their succession planning, it will also set up future opportunities for the employee. “If you’re sowing seeds in advance, by the time you’re ready to retire they will come to fruition,” Mills says. (View Retirement Transitioning programmes)

Vickerstaff advises organisations to keep checking in with employees about their plans. “The conversation should be part of appraisals. It should also be part of day-to-day conversations,” she adds.

However, retirement isn’t always a matter of choice. People might find themselves out of work because of ill health, caring responsibilities or redundancy – something that should also be planned for as a potential scenario – says Donna Marshall, chief people officer at Age UK. “These situations are likely to disrupt financial plans and reduce the income that people thought they were going to have in later life,” she explains. Ensuring financial plans account for various scenarios is important. Only half (53 per cent) of people believe they are knowledgeable about pensions, a 2025 Aviva study found. Additionally, 20 per cent said they were unaware of their own pension type. Although employers cannot directly give pensions advice, bringing in an external speaker to educate employees can be helpful, Vickerstaff says.

Retirement is a gendered issue

While pensions are a key part of retirement planning for all workers, the issue is even more pertinent for women as a result of the gender pension gap. The pension wealth of women in their 60s is 33.5 per cent of a man’s on average – a difference of around £136,000 – according to Now Pensions. “The options for retirement will financially tend to be a bit more restricted for the average woman, simply because they’re more likely to have a choppy work history,” says Vickerstaff.

Divorced or single women often have to continue working longer as their financial circumstances can prevent them from retiring early. However, Vickerstaff explains that women can often be more psychologically prepared for a transition to part-time work as they approach retirement because this reflects patterns established during their working lives, such as while raising children.

How can HR begin conversations?

When approaching a colleague who may be thinking about retirement, HR should begin an open dialogue in a non-judgemental way. This can be achieved by framing the conversation around future career plans, advises Marshall.

Ultimately, the topic should always be approached sensitively. “It’s very important that managers don’t force people out of work or appear to be seen to do so. Not only is this likely to be against the law, it is also bad practice that can harm productivity in an organisation,” she adds.

These conversations could also focus on the impact the employee has made on the organisation, rather than focusing on their exit. “People should feel they’ve left a legacy at the organisation so, even if they’re not there anymore, their contribution is still valued,” adds Mills. “A positive exit is a win for everyone.”

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