Each year almost 200,000 Australians are made redundant, with many people in their middle and later years finding themselves targets.
Each year almost 200,000 Australians are made redundant1, with many people in their middle and later years finding themselves targets.
With 120,000 unemployed Australians aged 45 to 642, older workers made redundant face an up-hill battle to find a new job. Those over 45 face an average period of unemployment of 96 weeks, while the under 45s are only looking at 38 weeks3.
According to Grant Salmon, Aviva’s chief operating officer, workers should recognise redundancy as a reality and plan for it.
"Many people who end up categorised as 'older workers' still have significant financial commitments in life, and may still be raising families or putting them through university," said Grant.
While Government policies are attempting to change this trend, these figures show the extent of the problem. Around 30% of 45 year olds and 60% of unemployed 55 years olds are unable to get work because employers consider them too old4.
"Adapting a personal investment plan to grow wealth during your years of employment will mean you have a buffer against the lean times. If you are fortunate enough not to have to draw down on your own savings you will be able to afford an even more comfortable retirement," said Grant.
Since 1975, Australia has experienced the largest decline in workforce participation rates of men aged between 55 and 59 in the OECD countries5.
"These figures are a sad indictment on our society, with some of our most knowledgeable workers lost to the workforce because they are perceived as being too old," comments Grant.
When made redundant, there are immediate financial issues, both long and short term. Of course, your salary will cease – hopefully a redundancy lump sum payment will cover any immediate financial commitments, during any period of unemployment.
Secondly, your superannuation benefits will stop – possibly leaving a large dent in your retirement savings. For older workers looking towards retirement this is a major issue, especially if they are unable to find a comparable job and have to settle for a role with lower remuneration or a part time situation.
"People need to ensure they can afford to be made redundant. It’s about asking some basic questions - have I got a robust retirement savings scheme, which won’t be jeopardised if I leave the work force earlier than expected? Or, do I have enough savings/investments to help me take care of financial commitments if I am out of work?" adds Grant.
There are methods of minimising the impact of redundancy on your current and future lifestyle. A financial planner can help you structure a financial plan taking all possible life events into consideration, including redundancy.
-end-
1 Australian Bureau of Statistics, More back in work after retrenchment, August 2002, Canberra.
2 Australian Council of Trade Unions, Age Discriminations Worsens: Older Unemployed Can’t Get Jobs, February 2004.
3 Australian Council of Trade Unions, Older workers background paper, July 2003.
4 Australian Council of Trade Unions, Age Discriminations Worsens: Older Unemployed Can’t Get Jobs, February 2004.
5 The Age, Oh no! We forgot to have kids, November 2003, Melbourne.
For further information please contact:
Simon Morgan
tel: (03) 9829 8892
mob: 0407 966 632
Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia
- Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$66.08 billion, and more than A$472 billion of assets under management (as at 1 January 2004). The group has more than 59,000 employees and 25 million customers worldwide
- The information in this document reflects Norwich Union Life Australia Limited's (NULAL) and NULIS Nominees (Australia) Limited's (NULIS) understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on specific circumstances. The securities advice or information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision on the basis of the advice above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the advice is appropriate in the light of their particular investment needs, objectives and financial circumstances
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