Likewise, longer lives will mean longer careers to fund them – with mortality and health risks as well as non-standard working rising in older age.
A recent study by Zurich found over a third of UK gig economy workers over 55 use it to ease the transition into retirement. Younger workers may also need to take career breaks or work part-time to take on caregiving duties.
Vulnerabilities in the emerging world of work matter to all of us.
For individuals, the effects of disability, illness or premature death can be long and severe. More than 60 per cent of UK families would see their income drop substantially if they relied on state support alone.
In the EU, people who identify themselves as disabled are 15 per cent more likely to face poverty.
‘Presenteeism’, where workers do not disclose illness for fear of reprisals or lack of cover, costs businesses billions in lost productivity. For governments, vulnerable workers mean higher demand for welfare including in later life, as well as lower tax contributions.
Solutions must be found urgently and collaboratively if we are to transform social protection from fragile to agile. It is unrealistic to expect the burden to fall on governments alone.
Public resources are already stretched and will likely be further strained by factors like ageing demographics. Meanwhile, one company can no longer be responsible for an individual’s career-long protection.
Insurance providers and advisers have an important role to play – we need to create solutions that move away from products focused on traditional career paths.
Some core elements for solutions are already apparent. Income continuity must be a focus – following individuals across jobs through disability, illness, caregiving leave, and other career breaks.
Countries such as Austria already have portable pension schemes, which include independent workers.
Meanwhile, technology can also be part of the solution. In Zurich's previous work around income protection gaps, it found experience trumped even financial literacy in spurring demand.
Using ‘gamification’ and other technology-driven tools to simulate income interruption scenarios could make a difference.
Finally, as the workforce ages, we will need to help older employees remain in work – accommodating a phased approach to retirement.
We can no longer just ‘admire the problem’. We need to establish flexible insurance and associated worker protections.
Multiple stakeholders must work together to deliver solutions that address the various needs of our future workforce throughout their working lives. This is agile protection.
Gary Shaughnessy is chairman of the Z Zurich Foundation
