It’s clear there is something really important going on in society right now.
Plans for later retirement have big implications for the economy and business, indeed there could be nearly five million people working beyond age 65 in the coming few years, whereas there are only around 1.2 million now - that’s a massive change. It’s good news for younger people and also important for pensions of course.
What does it all mean? Here is my latest Q&A.
Retirement is changing as nearly five million people plan to work beyond age 65: A nationwide survey of over 50s has revealed some startling findings about attitudes to work and retirement. It is clear that a major re-evaluation of retirement is underway with the overwhelming majority of people wanting to keep working until age 65 and more than half wanting to still work between ages 65 and 70 - although preferably on a part-time, rather than full-time, basis. If the results are applied to the whole UK population, this suggests 4.8 million people want to keep working and not be retired between ages 65 and 70. Currently, there are around 1.2 million over 65s still in work. Therefore, there is potential for a significant rise in later life work.
Half of people have adjusted retirement plans and expect to work later: Traditional ideas of a fixed, one-off, retirement date no longer seem to apply. Around half of people have changed their retirement plans in recent years and now expect to retire later - which confirms that later life working is becoming an increasingly important issue.
Only 40 per cent of over-50s actually want to stop work altogether in their 60s: When asked what their ideal working pattern would be between ages 60 and 65, only 15 per cent of non-retired over 50s said they would want to stop working altogether and when asked their ideal working pattern from ages 65 to 70, around half would like to still be working. Only 40% said they would want to be retired altogether - and only 5 per cent of people say they have not thought about this question. These findings clearly indicate that people are thinking differently about retirement. Planning to work longer is becoming a reality.
Traditional idea of retirement outdated as people want to work part-time before stopping altogether: Nearly two-thirds of over 50s do not believe that working full time and then stopping altogether is the best way to retire. More than a third (36 per cent) of those already retired would advise people to work part-time before retiring altogether.
Employer attitudes need to change, more later life training and flexible work: To help make later life working a reality for more of those who want it, there will be a need to be a shift in employer attitudes, different approaches to recruitment and more emphasis on later life training. In this regard, it is encouraging that almost half (47 per cent) of all over 50s still economically active would be interested in taking a training course to improve their skills. If employers can help people can combine training for new roles, or improving their skills, with flexible working as they get older, the survey suggests there would be a major increase in wellbeing for our ageing population, as well as better economic growth.
Nearly half of over-50s unaware that they won’t pay NI contributions if working past 65: One fascinating finding is that nearly half of over 50s were unaware that they can work beyond age 65 without having to pay National Insurance. This suggests scope for further education and information to help people understand the significant potential benefits of working longer if they wish to.
Support for idea of ‘gap-breaks’ in later life, then return to work refreshed: One in four over 50s said they would be interested in taking a few months off and then returning to work, as an alternative to retirement. Many people could benefit from a break, after years of full-time work, but after that break would benefit from returning to work again. The way we approach retirement needs to change. There is an opportunity to refine retirement so that it can fit better with people’s lives. Employers will potentially face skills shortages in coming years, but allowing more flexibility for older workers, improving later life training and facilitating caring responsibilities if possible can all improve quality of life for older people while simultaneously benefitting business and the economy.
2.3million retirees miss work, wish they’d worked longer and miss the social interaction: More than one in five retirees say they wish they had worked longer (equivalent to 2.3 million people nationwide). 38 per cent of retired people say they miss the social interaction of work, indeed far more than the 27 per cent who say they miss the income. Around one in five (18 per cent) say they miss the feeling they are doing something useful. Over a quarter (27 per cent) of those now retired wish they had worked longer, including those who had to retire due to illness or disability. Applying this to the whole population suggests 2.3 million retired people wish they had worked longer.
One in 10 felt they had to retire but didn’t want to: Importantly, 11 per cent of retirees say they did not really want to retire but felt they had to, or were expected to. This urgently needs to change, in order to make the most of the skills, talents and experience of our older population. If people feel they have to retire even if they don’t want to, we are wasting resources for the economy as a whole individuals affected will be poorer than they need to be for the rest of their life. Conversely, enabling people who want to keep working in later life to do so, can mean higher lifetime income for millions of people, more output in the economy and higher spending power in the longer term, which will mean higher economic growth and better living standards for all of us.
Dr Ros Altmann is a pensions expert and the Government’s Older Workers Champion.