The world of work and the economy need to adapt to the new opportunities of increasingly active older people, both in terms of the potential workforce and the marketing opportunities.
Continuing some form of work can give people the opportunity to use their skills and experience, maintain social networks, boost their retirement income, maintain a strong sense of purpose and stay healthy. Recent research has shown that retiring later may delay the onset of dementia.1
“Work provides the feeling that one is still fully in control of one's own life and destiny – not merely an impassive bystander.” Individual respondent to HMG, Preparing for our Ageing Society: A Discussion Paper (2008).
“Work provides the feeling that one is still fully in control of one's own life and destiny – not merely an impassive bystander.”
Individual respondent to HMG, Preparing for our Ageing Society: A Discussion Paper (2008).
Potential financial benefits of working longer
It is not just the individual who benefits from working longer. Older workers continue to contribute to the economy, and provide experience to business: employers say they most appreciate the loyalty and maturity of people aged over 65.2 Adding an additional year to working lives could increase UK Gross Domestic Product (GDP) by around 2 per cent.3 Some people want to retire early but others want to work for longer. We need to give them the flexibility to choose what is right for them. We will work together with the business and voluntary sectors to achieve this, as well as continuing to tackle the barriers to working longer such as inadequate training, negative employer attitudes and poor health.
FACT 1: Together the drop in work rates among men over 50 and ageism in the workplace is estimated to have cost the economy between £16 billion and £31 billion per year due to lost GDP.4
FACT 2: A 2002 survey found that 50 per cent of men and 40 per cent of women who retire before State Pension age say they were ‘forced’ out of work.5
FACT 3: There is a 17.4 per cent gap between the employment rates of those aged 50 to 69 and the 16 to State Pension age population as a whole.6
FACT 4: A 2004 survey found that half of workers aged 50 to 69 would consider working part-time or occasional jobs after they retire, but only 10 per cent would consider full-time work.7
Employers can also benefit from older people as customers. People over 50 currently account for 80 per cent of national wealth and 40 per cent of annual consumer spending8 and business is starting to recognise the opportunities of providing products and services for people in this age group.
The Employment Equality (Age) Regulations, which came into force in 2006, provide for a Default Retirement Age of 65 that employers can rely on if they wish. The regulations make earlier retirement ages unlawful unless employers can objectively justify them. The regulations also introduced a new statutory right for individuals to request postponement of retirement beyond the age of 65 – requests which the employer must consider. In Opportunity Age we said that it was our long-term aim to consign fixed retirement ages to the past.9
We announced that in 2011 we would review whether the Default Retirement Age was still appropriate and necessary. The very different economic circumstances today – for businesses, and for individuals coming up to retirement – in comparison to 2006 when the age regulations came into force, suggest that an earlier review is needed.
We will, therefore, bring forward the review of the Default Retirement Age to 2010. We have now started the process of engaging with stakeholders and gathering evidence to inform the review. We will look at many issues including the needs of business and individuals in the prevailing economic climate, and the need for employers to manage the structure of their workforce. To that end we are committed to continue working with representatives of employers, such as the Confederation of British Industry, as well as representatives of employees and older people’s organisations such as the trade unions, Age Concern, Help the Aged and older people's forums.
If the evidence shows that the Default Retirement Age is no longer needed we will act to make the necessary changes to legislation. We would support employers through this, and any changes would not be implemented until 2011. This would give employers sufficient time to prepare, and employees time to consider what impact the new circumstances would have on their plans.
Employers' attitudes and practices are essential to giving people choice over how and when to retire. We launched the Age Positive initiative in 2000 to tackle ageism in the workplace. By working with employers and their representatives, along with a range of leading business organisations, we have raised awareness of the business benefits of recruiting and retaining workers aged over 50.
“I am currently in my 50s and worried to bring up things like reducing hours in case I jeopardise my job.” Individual respondent to HMG, Preparing for our Ageing Society; A Discussion Paper (2008).
“I am currently in my 50s and worried to bring up things like reducing hours in case I jeopardise my job.”
Individual respondent to HMG, Preparing for our Ageing Society; A Discussion Paper (2008).
We will extend the Age Positive initiative to work with business leaders to identify how we can encourage other employers to give employees more choice over their retirement. We will deliver guidance and toolkits tailored to an employer’s sector and size to help them extend their employees’ working lives. Alongside this we will establish links with employment projects aimed at people aged over 50 to learn from their experience and promote good practice.
Often, the underlying reason for early retirement is caring for relatives and close friends, and one in five people gives up work to provide care.10 We are working with Employers for Carers to promote good practice around supporting people in work who also have caring responsibilities.
Question for consultation
Q6. What more can we do to enable business to understand the benefits of recruiting and retaining employees aged over 50, and to develop workable strategies for benefiting from an ageing workforce?
“I didn’t know there were all these websites. I will go on them when I get home. It has made me feel positive.” Respondent in Hedges, A. and Sykes, A. (forthcoming). Extended Working Lives: Changing the Culture.
“I didn’t know there were all these websites. I will go on them when I get home. It has made me feel positive.”
Respondent in Hedges, A. and Sykes, A. (forthcoming). Extended Working Lives: Changing the Culture.
We will improve the information people can access when they are considering moving from work to retirement to help them make decisions about whether to work longer. This will include options for working longer, the implications of these options on their finances and other areas and how to approach employers and others to make this happen. This information will be available as part of the ‘one stop shop’ for helping people planning ahead (detailed in Chapter 3), and the communications to support the implementation of pension reform.
Q7. How can we encourage people to consider their options for working longer and ensure they have access to the information they need to make those decisions at the right time?
Older workers, at least up to age 70, are as productive in most jobs as younger workers when they receive the same level of training.11 However, people over 50 are much less likely to undertake training, and only 10 per cent of adult apprenticeships are currently taken up by this age group.12 We will continue to work with businesses to overcome reluctance to train older workers through the Age Positive initiative.
We introduced New Deal 50 Plus13 in Jobcentre Plus nationally in 2000. This offered a range of targeted back-to-work help for people over 50 who have been unemployed for over six months and who are receiving qualifying benefits. New Deal 50 Plus is being replaced by the Flexible New Deal from October 2009,14 which will provide a more personalised, flexible approach to back-to-work support, defined by individual needs rather than age. Programmes such as Train to Gain give strong support to people wanting to develop their skills at all levels, and new flexibilities are being introduced, for example for people facing redundancy and people working in small businesses.
Around half of people who leave work before State Pension age do so due to ill-health.15 Research shows that carers who are also working often suffer ill-health as a result of the stresses and strains of doing this. We will work with the National Endowment for Science, Technology and the Arts to find new ways to organise work and new approaches to address ill-health as a barrier to working longer.
“Lots of people are doing jobs they don't like – we need to have more opportunities for older people to retrain for jobs they want and then ensure there are jobs for them to go into.” Individual respondent to HMG, Preparing for our Ageing Society; A Discussion Paper (2008).
“Lots of people are doing jobs they don't like – we need to have more opportunities for older people to retrain for jobs they want and then ensure there are jobs for them to go into.”
Older people have considerable experience which can be valuable to the education sector. We will draw on the skills of ex-teachers in helping deliver our pledge of 600,000 one-to-one tuition places and we will attract teachers who have been out of the profession to return. We will build on the fact that teaching is a top choice for people considering a change of career, with one in ten people changing careers citing teaching as their preferred choice of job.16 The Training and Development Agency will raise awareness of teaching as a career choice to people over 50 through a number of programmes. These include simplifying employment-based routes into teaching, and tailoring marketing to employees of companies making more than ten individuals interested in teaching maths or science redundant.
Lifelong Learning UK17 plays an important role in helping to attract people to teach in further education. It is leading work on a series of recruitment campaigns aimed at encouraging people with vocational expertise to apply to work in the further education sector.
We will develop a fully joined-up package of support, both in terms of finance and advice, for people aged over 50 considering self-employment or social enterprise. This will be achieved by building on the work of Jobcentre Plus and Business Link and working with the Regional Development Agencies, the Prince of Wales' Initiative for Mature Entrepreneurs (PRIME) and the private sector including Bank of America, PRIME's key corporate partner.
“I find it really frustrating that I can't get travel insurance to go scuba diving just because I'm 82.” Individual respondent to HMG, Preparing for our Ageing Society; A Discussion Paper (2008).
“I find it really frustrating that I can't get travel insurance to go scuba diving just because I'm 82.”
To take advantage of the business opportunities from longer lives, we have published New Industry, New Jobs,18 the Government's vision for Britain's economic and industrial future setting out key areas where Government action can have most impact. This acknowledged the opportunities and challenges presented by an ageing population and proposed an Innovation and Growth Team which will draw up an action plan for business and Government to take advantage of the economic opportunities presented by an ageing population. The team of experts from academia, business and the age sector will be responsible for identifying business opportunities and will make its recommendations to Government by spring 2010.
We will promote an age design programme to ensure products and services in the UK economy increasingly meet the needs of our ageing population. In addition to encouraging innovative design in housing and neighbourhoods, included in Chapter 8, we will support Age OK. This is an initiative launched in April 2009 by Age Concern, Help the Aged and the Engage network19 which includes over 50 businesses such as Marks & Spencer, Microsoft and Barclays. Age OK is an accreditation that sets a benchmark for products and services that meet the needs and interests of people in later life. The first award was recently made to Sky TV who offer alternative remote controls that have larger and bolder graphics for easier button identification, raised contoured buttons with more reference points, increased colour contrast between the body of the remote and the buttons, and either a textured back or a back strap.
We will support inclusive design standards as set out by the British Standards Institution.20 Inclusive design seeks to ensure that products, services and environments are accessible to the largest number of people. We will organise a seminar for designers and business to promote its use. We are supporting the Royal College of Art and Design Business Association on their 2010 Inclusive Design Challenge to enable it to be focused on goods and services in an ageing society, and the Royal Society of Arts on their Design Directions Awards. The 2009 awards are part of their Action for Age project, addressing issues of isolation and marginalisation in later life. This will conclude in an awards event in spring 2010.
Working longer helps individuals to have financial security in their later lives. However, people also need to save for their longer retirement. The State provides a base level of pension and private saving builds on that. Private saving will be made easier by the recent reforms to the pension system.
