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Hybrid working: how’s that going for you?

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SPECIAL REPORT

Hybrid work isn’t hitting the mark for parents and workers over 50 says new research

Millions of contractors and freelancers have been working remotely or in some hybrid fashion for years. But now that more people have had a taste of the hybrid working life since the pandemic, are they more likely to keep at it or call it quits? And what are the implications for the world of work and society if we all want to work from home just as the contract-for-hire trend is on the rise?

Fast facts on hybrid working

  • Before the pandemic, one in eight working adults worked from home
  • During the pandemic, hybrid working or WFH peaked at 49% and during 2022 it fluctuated between 25% and 40%
  • Between September last year and January 2023, 16% worked from home, and 28% worked on a hybrid pattern
  • Parents, older people, higher earners and self-employed people were more used to hybrid work or working from home
  • 16% of men and 17% of women work entirely from home, and 27% and 29% use hybrid working

Source: Hargreaves Lansdown, ONS


“Hybrid working has hit home among older people and parents,” said Sarah Coles, head of personal finance, Hargreaves Lansdown.

“Fitting work around our lives and not the other way around could be one key to solving labour shortages, and earnings disparities between parents. Those with children at home find it easier to juggle their responsibilities when they can work from home at least part of the time, while older people may be more convinced to stay in work if they don’t have to schlep halfway across a city in order to do so,” she said.

ONS statistics have shown that while homeworking is nowhere near the peak it hit during the pandemic, home and hybrid working patterns have hung around long after restrictions were lifted.

“Those with the ability to work from home, and seniority to insist on it, are far more likely to have adopted new working patterns. It’s one reason why almost one in three self-employed people say they work entirely from home,” said Coles.

This is the solution for an awful lot of working parents, according to Coles, adding that 31% of people who work in a hybrid pattern – compared to 26% of those without dependent children. The age of the child has little impact, according to Hargreaves Lansdown.

“This isn’t a shock, because parents won’t be working with toddlers in tow, wherever they’re based, it just makes childcare much easier to manage. Those with older children, meanwhile, have the ability to manage care before and after school much more effectively when they are at home – and are more able to react to a change in plans,” said Coles.

The gender pay gap doesn’t open up at the age when people have their first child: it often does so a few years later, said the personal finance expert.

With women compromising their working hours or location to provide child care – especially when they have more than one child a career can get stifled.

The responsibility of childcare must be shared more equally among parents and society if the British economy wants to see earnings growth among households.

“The growth of hybrid and home working – and especially the fact that men and women are equally likely to adopt it, could be essential in allowing families to provide care for their children without enormously compromising the ability of either parent to progress in their career,” suggested Coles.

How to get more people over 50 back into the workforce

The emergence of home and hybrid working could be a game changer for older people who want to remain in work, but don’t want to devote so much of their time to commuting and office politics.

That’s according to Helen Morrissey, head of retirement analysis, Hargreaves Lansdown.

“Many older workers are also providing care for other family members and need flexibility over how and where they work. The government is assessing the most effective ways to encourage people over the age of 50 back into work, and support for these kinds of working patterns is an essential component in that plan. There’s a huge opportunity to make returning to work much more attractive for older people by enabling them to fit it into their lives in a way that works for them,” said Morrissey.

Jeremy Hunt has indicated that the best way for over 55s to future-proof their finances is to return to work. But hard-working Britons deserve to make their own decisions about their future, without feeling pressured by the government.

Andrew Megson, CEO of My Pension Expert

Impact of inflation on retirement plans

The latest ONS inflation figures, which found that inflation eased to 10.1% in January, are heading in the right direction, but the struggle is far from over, according to Andrew Megson, CEO of My Pension Expert.

“The light at the end of the tunnel might be getting a little brighter, but it would be a mistake to consider this easing as a genuine comfort to struggling Britons,” said Megson.

Prices are still climbing at a dramatic pace, which is putting great strain on people’s finances. And those nearing retirement are among the hardest hit, said Megson, with many feeling “forced to abandon their plans to exit the workforce.”

He said that 44% of over-55s in work now believe the cost-of-living crisis has rendered retirement impossible, according to My Pension Expert’s latest research.
 
“Jeremy Hunt has indicated that the best way for over 55s to future-proof their finances is to return to work. But hard-working Britons deserve to make their own decisions about their future, without feeling pressured by the government,” said Megson.
 
Megson said Inflation is likely to pose challenges people’s finances for the foreseeable future. However, those aged 55 and over needn’t assume that remaining in or returning to work is the only solution.

“Those concerned about their plans ought to seek help from an independent financial adviser, who will help them make informed choices and identify the best approach for their unique financial circumstances. Such support will provide a much-needed boost of confidence that retirement is within reach, despite a turbulent economic climate,” he said.

According to data from the Office for National Statistics, approximately 575,000 people have left work since the start of the pandemic, which is equivalent to almost 2% of the UK’s workforce.

“In most major economies, there are more people in work today than pre-pandemic. In Britain, it’s the other way around,” said James Green, of IFA deVere Group.

“A shrinking workforce means that action will need to be taken,” said Green.

“As we have seen time and again, successive UK governments have shown that they see pensions as an easy target they can raid or tweak whenever they deem it appropriate. This is unlikely to have changed, especially in light of the scale of the issue,” he said.

In January, the deVere Group Investment Director suggested that Chancellor Jeremy Hunt’s 2023 Budget on March 15 could see UK pensioners increasingly seeking to “move retirement funds overseas” as fears grow about government plans to tap into retirement savings.

Lack of choice plays a major role: 46% of those who travelled to work every day said they couldn’t work from home, and only 10% said they could work from home but chose to travel in.

Hargreaves Lansdown

What if office work is your only viable option?

“However, there remain an awful lot of people for whom flexible working is beyond the realms of possibility,” said Coles.

“Younger people are still packing out buses across the UK. Some 79% of those aged 16-24 travelled to work. And while some employment experts have argued that this is essential for training and socialising, it’s not the main reason they travel to work: 65% of them said they couldn’t work from home – making this the most common age group with no choice,” she said.

Lower earners are also likely to have to go into work. Among those earning up to £10,000, 75% travelled to work and couldn’t work from home – compared to those earning £50,000 or more where 80% worked from home or hybrid, according to Hargreaves Lansdown’s report.

Those in professional occupations were most likely to work from home at least some of the time, and those in elementary occupations were least able to. Only 1% of carers worked from home (plus 3% hybrid), 4% of people in leisure and other service occupations (10% hybrid) and  5% of process, plant and machine operatives (5% hybrid). 

Some of it is influenced by the commute – particularly in London where commutes are far longer on average. 40% in the capital said they used hybrid working.”

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