Hard-up elderly staying in work a little longer

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The average age of retirement has risen as those approaching state pension age struggle to pay for their later years.

Figures released by the Office for National Statistics showed people are working longer as the average age at which they leave the labour market rose from 63.8 years to 64.6 years for men and from 61.2 years to 62.3 years for women between 2004 and 2010.

Paula Bee, chief officer at Age UK Wakefield, welcomed the number of work opportunities for older people but said the figures were indicative of the financial difficulties facing them.

“The fact people are entitled to work longer is an extremely good thing,“ she said. “But the fact that people are needing to work longer reflects what has happened to pension funds and to people’s expectations in their older years.

“The opportunity to work enables older people to retain their independence and health in their later years and they welcome to opportunity to generate an income.

“But it is also indicative of the fact that they are feeling the pinch and are not feeling confident in their pension arrangements.”

She added: “If older people are working longer, they are making a valuable contribution to society. But I would say people are having to work longer rather than doing it out of choice.”

The Office for National Statistics figures showed increasing the state pension age would cut the demand on working people.

There were 3.2 people of working age supporting each person of state pension age and over in 2010; without any changes to the state pension age, this ratio would drop to two by 2051 – piling pressure on the working population.

Under current legislation the state pension age has already started to increase for women and will rise to 68 for both sexes by 2046, meaning 2.9 people of working age will support each person of state pension age by 2051.

Before the Autumn Statement last year, the age was expected to rise to 67 between 2034 and 2036, and then 68 between 2044 and 2046, but in November Chancellor George Osborne announced plans to introduce a state pension age of 67 earlier than expected. He said this rise would start eight years earlier – in April 2026 – meaning eight million people aged under 52 will have to work longer

The Government said the latest announcement was the result of rising life expectancy, and the rising cost of state pensions.

The increases were a “commitment of fairness to those who have worked hard all their lives”, he added.

Elsewhere, the Office for National Statistics found there are inequalities in life expectancy between social classes in the UK.

The latest estimates for England and Wales show a gap of more than three years in life expectancy at age 65 between the highest and lowest classes in statistical classification.

In the UK, life expectancy from the state pension age is highest in England and lowest in Scotland.

The study also looked at how healthy men and women were likely to be from the state pension age onwards. In 2008, UK men at age 65 had 9.9 years of healthy life expectancy out of a total of 17.6 years of remaining life expectancy. Women at age 65 had 11.5 years healthy life expectancy out of 20.2 years of life expectancy.