My father is 84 in February. Older age does of course bring some challenges but one thing which never fails to put a spring in my father’s step is the fact he has now been retired from the civil service for longer than he worked for the civil service. Both he and my mother had retired by the time they were 57.
At the time, this was not unusually young to retire. State pension age was 60 for women and 65 for men. It was before the Employment Age Equality Regulations came into force in 2006 and consequently it was still legally possible to force people to retire at 65. That being the case most people did plan for retirement by 65 at the latest, and earlier if they could afford it.
Now that state pension age is 67 for both men and women (rising to 68 between 2044 and 2046) and the default retirement age of 65 has been scrapped for 16 years, many of us could not contemplate retiring in our 50s. According to ONS statistics there are over six million UK adults aged 55-plus who still work. 41% plan to delay retirement, keep working part time or keep working full time, equating to 2.5 million people.
Legal & General recently released the results of research carried out by Opinium Research amongst 2,003 UK adults aged 55-plus still in work between the 8-17 November 2022. This category of people is known as pre-retirees.
L&G’s research found that the cost-of-living crisis is causing pre-retirees to delay their retirement. Those planning to delay their retirement say they will need to push it back by almost three years on average, with nearly two thirds (64%) unable to afford the loss of income whilst costs are so high.
Over one in seven pre-retirees (16%) are also presently looking for additional work in order to boost their income, and one in 10 (10%) are concerned about the stability of their job in light of the current economic conditions.
However, while a need for income remains a priority for many who plan to delay, a desire to stay in the workplace is also driving many people. Other reasons for pushing back retirement include people simply enjoying their jobs (26%). A further one in four (25%) say they don’t feel old enough to retire yet, while a fifth (20%) worry they will be bored if they retire.
Not surprisingly, L&G’s press release on the research focused on those delaying their retirement due to rising living costs and encouraged people to seek guidance for managing retirement planning. However, what is also clear from the research is that more than one in four pre-retirees do not consider themselves as being in the retirement zone at all. Indeed, a foot note to the research shows that 1.16 million working adults aged 55-plus plan to work indefinitely part time and 546,000 plan to work indefinitely full time.
When the modern state pension was introduced in 1948 a 65-year-old could expect to spend 13.5 years in receipt of it. Today at the age of 65, life expectancy for men is another 18.5 years and for women 21 years. We live longer that we did, have children later in life than we did and so we work longer.
A positive take from the research is that of the people surveyed one in four are delaying retiring because they are still enjoying their jobs. As the world of work continues to change following the pandemic, retaining the skills and experience of older workers is an advantage to employers. Having policies in place to support and manage older workers to include a menopause policy will help ensure the retention of those skills and avoid issues of age discrimination.
Bethan Darwin is a partner with law firm Thompson Darwin.
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