A review of Aviva’s Real Retirement research from 2011, along with data from the Office for National Statistics (ONS), provides a clear picture of the overwhelming contribution the over-50s are making to working life in the UK.
Office for National Statistics (ONS) figures show a record 302 in every 1,000 adults employed during the first half of this year were aged over 50 in comparison to just 213 adults in every 1,000 employed in early 1992. This represented an increase of 42%.
Meanwhile, the total number of 50-64s in work in Q2 2015 reached a new high of 8.24m.
This is in part due to the changing demographics, including the baby boomer generation now all aged over 50, and that people are generally living longer.
However, this number has also been helped by the abolition of the Default Retirement Age from 1 October 2011, which meant employers could no longer force their staff to retire at 65 on the grounds of age alone.
Since then, employment among over-65s has also grown significantly, up by 33% from Q3 2011 – the final quarter before the DRA ended – to Q2 2015.
This is the fastest growth rate of any age group and compares with a 6% rise in the total number of working adults across all ages.
The second fastest growth rate (11%) was among 50-64s, which suggests the number of working over-65s will continue to rise in the years ahead.
Of the 1.76m extra working adults in Q2 2015 compared with Q3 2011, 45% were aged 55-64 (1.07m) and a further 16% were aged 65+ (285,163).
Aviva’s Real Retirement research, which has tracked personal finances among over-55s since 2010, suggests this period of growing employment has contributed to an upturn in many people’s financial fortunes in later life.
Median monthly incomes have risen 26% from £1,091 in Q3 2011 to £1,376 in Q2 2015, while typical saving and investment pots have more than doubled from £7,969 to £17,590.
At the same time, over-55s’ average debt has dropped across various types of unsecured borrowing.
The average credit card debt has fallen 15% from £916 in Q3 2011 to £775 in Q2 2015; average personal loans have reduced 25% from £677 to £509; and average overdrafts have dropped 40% from £157 to £94.
Aviva’s data also indicates that work has become more important to people’s sense of financial security in later life, particularly among those aged 55-64 and approaching the former Default Retirement Age.
Just 5% of this age group saw retirement as a threat to their living standards in Q3 2011, but this more than doubled to 11% in Q2 2015.
This is more evidence that the nature of retirement and work in later life is changing.
60 is the new 50, with many now considering what used to be a standard retirement age as ‘young’.
The removal of the default retirement age in October 2011 has resulted in more older employees in the workforce.
But as baby boomer are ageing, more are continuing to work rather than choosing to retire.
What is so important is to have a plan for retirement rather than just a plan for continuing to work.
Poor health or lack of suitable work can often force an early retirement, despite an intention of continuing to work in later life.
This means it is essential to have a plan to support your lifestyle when you choose to stop working or you are forced to stop working.