Before the quantum medical advances that have extended human life spans to today’s previously unthinkable limits, retirement was a word that hardly figured in the vocabulary of the day – people simply worked until they died.

But as longevity increases with every medical breakthrough, coupled with drops in birth rates the world over, governments with State pension schemes are increasingly faced with the conundrum of how to continue to finance retirement funds.

When I asked HSBC Group Retirement Business Head Steve Troop for his views on the “problem” during a recent visit to Malta, he was quick to correct me. “Increasing longevity is a wonderful gift and I find it very difficult to get upset over the idea that people are living longer. But, on the other hand, I don’t diminish or underestimate the associated challenges.

“I think what we are seeing is a fundamental social change in the very composition of societies and the ways they are structured. Dr Sarah Harper of the Oxford Institute of Ageing summed up the crux of the issue when she recently asked, ‘Are we going to live in a world full of old people, or are we going to live in a world where people seem to live a lot longer?’

“I think that really defines the issue. If it is to be a world in which we live an awful lot longer, that would mean we have to plan more carefully – but it’s not a crisis.”

Mr Troop was speaking in the wake of the HSBC Group’s recently published ‘The Future of Retirement’ global survey, which took an in-depth look at global attitudes toward ageing and retirement, while attempting to put a more human face on research and statistics.

The study, with its sample representing 62 per cent of the world’s population, was carried out across 20 countries and is the first ever such study to gauge people’s hopes, dreams, fears and aspirations for their golden years.

And the study overturned a number of commonly held perceptions on ageing. Firstly, general attitudes and expectations toward ageing and later life were positive. The research also showed that people want more flexibility and freedom in the way they work and retire – more than what employers and laws normally allow for. People feel that governments alone will no longer provide for them in their old age, and as such, they would prefer paying for their retirements by means of government-enforced additional savings.

The study, which was carried out by HSBC in conjunction with Oxford University’s Institute of Ageing, also found that as they age, workers want more flexible work practices and overwhelmingly reject mandatory retirement on the grounds of age. Health permitting, people increasingly want to do something active in their retirement rather than just doing nothing after a life’s work.

Interestingly, it also emerged that people believe that family, friends and fitness are more important in determining happiness in old age than money alone.

Expressing a desire to extend their working lives, workers the world over rejected the concept of a mandatory retirement age. Workers, it seems, prefer remaining productive after crossing the age threshold and many companies are now looking at introducing schemes that will allow them to do just that. The idea of an interim phase where workers reaching retirement age would work a few days a week to continue to put something back into the company, is being taken up by employers. The mentoring concept, where skills are passed on by senior executives giving up some of their responsibilities to their more junior colleagues and coming in three or four days a week to coach them, has proved increasingly popular among businesses.

But, according to Mr Troop, employees should not necessarily have to wait until their approaching retirement to consider such options.

“If I were to say to you that you were actually going to live 10 to 15 years longer than you thought, where do you want those 10 to 15 years? Are you going to take them right at the very end when you would perhaps appreciate them least, or would you rather take them in the midst of your working life?” he asks.

“Looking forward, I think what will happen is that people will begin to re-pace their lives. We’re all in such a hurry now because we have to achieve and ‘be there’ by the time we are 50 because we all think we’ve only got till 70.

“But if you were to live to 90, 100, or 110 – you could take your time. Kids today take a year off between school and university, maybe they could start taking two years off instead. People are going to get into their 30s and the idea of a sabbatical becomes more appealing, or the kids reach an interesting age and you decide you would like to spend more time with them.

“It’s about taking this enormous gift of longevity you have and saying ‘I’m going to throw that back in to the rest of my life’.”

Employers, of course, have a crucial role to play in this redefinition of working life, but the larger employers have traditionally been governed by inflexible structures of their own, and of the authorities’ making.

Changes are also taking place at EU level, in particular to the regulation, which provided that up to April of this year, a worker could not retire from a company, receive a pension and then go back to work for the company part-time.

“I think that if we’re all going to have this period of reinvention, where we become flexible in how we work, we also have to have flexible structures to support that, or at least structures that are capable of flexibility,” Mr Troop commented.

And the market itself, he explained, could very well become flexible of its own accord as it competes for workers from an ever-shrinking labour force, as countries around the world – from the younger countries like Brazil to the older ones like Italy, experience increased longevity and declining birth rates.

“With a shrinking labour force,” Mr Troop explained, “companies will be competing for talent and will have to find imaginative and creative ways of engaging employees. There is, of course, enabling work that needs to be done around legislation and employment practices, but it is essentially a strong market component that will drive this change.

“I wouldn’t mind betting that in future, the best companies to work for will be those that have developed the most age-friendly employment practices.”

One finding that comes through strongly from HSBC’s research is that worldwide, even in countries such as Malta with strong State pension structures, people have now begun to feel that at the end of the day, financial provisions for their retirement years, although there is also a State responsibility, has increasingly become a personal responsibility.

“Helping people to help themselves is what it is all about. As much as anything else, trying to communicate the message there are certain things you need to do, and the earlier you start thinking about them the better,” Mr Troop advises.

“The conundrum is that young people can always think of something else to do with their money – financing their schooling, repaying student loans and getting married, which normally prompts the need to buy a house. Then children come along, they’re expensive and you have to start thinking about providing for their needs and education. And, somewhere down the list, is your own pension.

“For a lot of people, those decisions are taken too late in life. They reach their 40s and mortality ceases to be a concept and starts to become a reality. You start to realise that you are not going to live forever and you’re starting to run out of time.”

People, according to the survey’s results, want governments to create structures that oblige them to save.

“The research suggests that given some pretty unattractive alternatives – such as raising taxes, cutting pensions or raising retirement ages – people would rather save a bit more and, to be honest, be put in a position where they are forced to save a bit more.

“There is appetite for governments to create these structures and people want to stay in control of that process. This is not, however, contradictory – they want to be told they have to save, but they also want to have a say in that.”

Businesses also had an interesting perspective on their attitudes toward ageing workers. While confirming the well-established facts that older workers are generally more loyal and reliable, it also emerged that older workers are at least as, and perhaps more, flexible than younger workers. Older workers were also found to be able to pick up technological skills just as quickly as their younger colleagues.

Although this does not exactly fit with common perceptions, employers worldwide have nevertheless confirmed the attitude.

Mr Troop explains, “In some of the world’s emerging markets, employers still see retirement as an opportunity to bring younger people in, but more than half the employers around the world are concerned about losing the experience, insight and expertise that these workers have built up over the years.

Workers are also prepared to continue working post-retirement. The interim phase options and mentoring programmes can play a good role in meeting both employee and employer needs, but such schemes have seen a very small take up among the international business community.

“The mismatch appears when you ask employers what they are doing about it and you get the exasperated ‘ah…well’ answers. Intellectually, businesses have got it, but they haven’t quite put it into practice yet. That is where the enabling stuff has to happen in terms of legislation. Some of it will be driven by the market, and some of it will require creativity on the part of businesses and employers.”