How the ageing workforce is increasing insurance premiums for businesses in the UK

 

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With all the financial uncertainty brought about by the current economic climate, many workers are choosing to work beyond retirement age.

The default retirement age was previously 65. However, it has now almost been phased out completely: most people can now work for as long as they want to. With both state and private pensions dropping substantially, it seems many people might have no other choice.

In conjunction with this, it seems the average age of a workforce is on the rise. The high rate of youth unemployment suggests employers are looking for workers with experience. However, along with the positives of experience come some financial negatives: an ageing workforce can push up a business’s insurance premiums.

Income protection

It is estimated that around two million people above the age of 65 will be in employment by 2022, well above the current figure of 870,000. With the government actively encouraging people to say in work for longer, this doesn’t seem unfeasible. This is going to cause a rise in Income Protection Insurance.

Typically, Income Protection Insurance stops at retirement age, but will need to be extended for any employee that stays on. To extend the cover up to 70 has the potential to add 20 per cent to premiums. Full cover must be taken out for all employees, regardless of age, in accordance with equality laws. It’s wise for firms to plan their future costs with this in mind.

Employer liability insurance

As employees grow older, the chance of injury grows. If the job involves heavy lifting or delivery, then back problems are a possibility and even repetitive strain can be a danger in less physically demanding positions. It’s possible that this could affect your premiums, especially if any of your workforce has suffered injuries in the past and you’ve had to claim.

Of course, this is more a potential risk. It’s not necessarily true that an older employee will be more easily injured – but it is a risk worth keeping in mind.

Fleet Insurance

Motor fleet insurance is the easiest and cheapest way to protect your company’s vehicles. It can cover any kinds of vehicle, from transit vehicles to company cars.

But like with all motor vehicle insurance, motor fleet insurance can be affected by the age of the vehicle drivers. Motor insurance is rather cyclic, as in costs are high when a driver is younger, becomes cheaper as they become more experienced, then rise again as the driver becomes older. Generally, things like reaction time, eyesight and general health become issues with insurance companies, and these are seen as potential risks that could increase the chance of a claim in older drivers.

It’s a good idea to do your research and find the best deal for your fleet and your drivers to keep your insurance costs down. You can find deals online, like Fleet insurance from Flint that offer policies for fleets of any size, made up of any kinds of vehicles with drivers of any age – all at competitive rates.