Ros Altmann: Do we really want to work until we’re 80?

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GOVERNMENT forecasts suggesting an increase in average retirement ages by 6 months a year can only be a short-term aim. As people are living longer, it is inevitable that they will need to work longer too, in order to achieve higher lifetime incomes. However, a rise of six months a year would mean, over the next 30 years, people would be retiring at age 80! I’m not sure that’s a realistic policy aim.

Ageing population with falling birth rates can’t sustain ‘early retirement’: The age at which people retire is already rising, from what will surely be seen in the years ahead as unreasonably young. The notion of ‘early retirement’ which was meant to represent economic progress is fundamentally flawed, especially with an ageing population and falling birth rate! The maths don’t stack up. In an ageing population, with falling birth rates, it is a recipe for economic decline.

Don’t aspire to retire’ in your 50s any more: Since the 1980s, an expectation had developed that people should aspire to retire in their 50s. This is simply not sensible or sustainable, especially as life expectancy has risen significantly, general health has improved and the physical demands of most types of work have eased. Even those in physically demanding jobs can retrain to do other work but often need to be supported to do so.

People are still retiring younger than in 1950s: In fact, increasing numbers of people are already choosing to work longer. In the 1950s, the average age of retirement for men was 67. At that time life expectancy was much lower than it is today, yet people are retiring earlier. That means their lifetime income is lower (especially as they often start work much later too) and they have less chance to save for a good later life income. It is clear that change is needed, but we have to manage that change carefully. The state pension age is already set to rise to 68 (you can calculate your state pension age here https://www.gov.uk/calculate-state-pension) .

Not everyone can keep working but good for those who can: Clearly, if you are not well, or your work requires heavy physical labour, or if you are exceedingly wealthy and choose not to work at all, that is your choice. Nobody should be forced to work longer if they do not wish to, but most people could benefit from rethinking retirement if they are in reasonably good health.

There is no official ‘retirement’ age any more - individual choice: The traditional idea of stopping work as soon as you reach a ‘pension age’, whether that be state pension age, or the age at which a private or company pension starts, is now out of date. There is no official ‘retirement’ age any more, even though many commentators refer to the state pension age as a ‘retirement age’. In fact, average retirement age for women is just over 63, which is beyond their state pension age although for men it is still a little under age 65. There can be more individual choice about when to stop working altogether, rather than being forced out by employers or assuming you must stop at pension age.

Redefine 21st Century retirement: The traditional idea of retirement meaning stopping work altogether needs to change - it is already happening, but there is far more that could be done to help it become a reality. The 21st century concept of retirement should be a phase of life with less work, rather than no work. This has the potential to improve millions of people’s lives. The longer you work, the higher your lifetime income will be, and the better your pension prospects too. By having a period of part-time work in later life, you can also enjoy a better work-life balance, have time for grandchildren, hobbies or holiday breaks and still be part of the social interaction of work.

Hidden boost to economic growth and individual or family incomes: By keeping the skills of older people in the labour force, national output and national income will be higher, which can boost economic growth. At the same time, individual and family incomes will be higher too, which means more spending both now and in future.

Retirement should be an ongoing process, not a one-off event: This needs changed attitudes among employers and individuals. The old idea of retirement as a one-off event, rather than an ongoing process over a period of years, should be consigned to history. Flexible later life work opportunities, which retain the skills and experience of older people as well as enabling them to earn more if they want to, can boost society as well as the economy.

Work has non-financial benefits too, improve national well-being: There is evidence that stopping work altogether when still healthy can damage health and many surveys also show that people value working for non-financial reasons too. Many enjoy the social interaction and feelings of worth that are associated with work and others find they enjoy self-employment rather than no work. Society’s attitude to later life working can change to benefit all of us. That is the real message we need. It’s not just about retiring later, or raising retirement ages, it’s about a whole new vision for retirement in the 21st century. The sooner we can make this happen, the better all our futures will be.

• Dr Ros Altmann is a pensions expert.