Employment or Retirement?

Posted by Alexander Hay

Working hard at being old

How much longer will you have to work?

At first glance, it looks like good news. A TUC study, reported by Which? and the Yorkshire Post, suggests that the numbers of older people getting work and staying in jobs is rising. Of those between 50 to 64, the percentage is now 64.9%. For those over 64, the amount is now 9%.

Isn't this an improvement? Ageism is always a problem, and there are any older people who can stay in full time or part time work after they're apparently too old to work. But as ever, the devil is in the details.

The TUC itself admits the driving force behind the move is not a loosening up of ageist attitudes but a more pressing need - poverty. Many workers keep on working simply because they can't afford to retire. This is set to become a long-term trend. More than 70% of those under 45 fully intend to keep on working in one fashion or another after their official retirement age.

No Default Retirement Age

In part this is an inevitable cultural shift. We are living longer, and even if there was the money for everyone to retire at 65, that still means on average an extra 17.6 years of life for men and 20.2 years for women. Those who are still relatively healthy and have worked all their adult lives may well find the ensuing decades outside the structure and routine provided by the workplace, to be at best uneventful and at worse, soul-crushingly boring.

There will also be growing social pressure to keep on working, not least from the government that will both have to pay for pensions and raise the funds to afford them. The first time a retirement age was introduced was back in 1925, when extended life beyond 65 was the exception to the norm.

Affording Retirement

As early as 2001, some researchers were calling for a new retirement age of 72 in order to balance out the smaller number of workers and the larger number of pensioners. An increasingly ageing society like the UK may simply be unable to afford retirement in the traditional sense, or at the very least, lack the political courage to concult the public on how we carry on paying for it.

Needless to say, any change in pension settlements will be controversial, as shown by recent public sector protests. The protesters may, or may not, have had a valid point about the contractual obligations the government should honour towards them. But it seems unlikely that younger public servants will get anywhere near the pensions and retirement options their elders may yet retain.

Competition for Jobs

Another factor to consider will be a growing clash between young and old in the jobs market. While current evidence suggests there is little competition between young adults who've just entered the jobs market and those who have been part of it for a long time, this may not last.

If older people stay fitter and remain employable for longer, they may drive up youth unemployment simply because there is no room for new entrants. Similar iniquities already exist in the housing market where there are not enough houses and too many buyers. The social implications of us living longer requires more discussion and better planning.

This leads to the main problem facing an ageing workforce - not that it is there or indeed that it is living longer than ever, but rather, how to make the best use out of it. Those yet to retire may find themselves victims of their own longevity and good health.

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Alexander Hay

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