The latest increase in the UK state pension age has sent employment among 65-year-olds to a record high, while pushing those living in poorer areas to work longer. .
Research by the Institute for Fiscal Studies, published Tuesday, shows that around 55,000 people over the age of 65 are in paid work in 2021 as a result of the gradually increase pension age, from 65 to 66, from the end of 2018 to the end of 2020.
Reforms have resulted in 7% more men and 9% more women staying at work, bringing the employment rate for men aged 65 to 42% – the highest since the 1970s. Employment rate Females rose to an all-time high of 31%.
Emily Andrews, deputy director of evidence at the Center for Better Aging, the charity that funded the study, said it showed a higher pension age was “an effective policy for prolonging life”. the work of those who have jobs”.
However, the study also has some warning signs for policymakers as they prepare for a pension age increase to 67 from 2026 and as an independent review begins to look at the case for further increases to manage the fiscal pressures of an aging population.
First, people living in poorer areas are more likely to continue working while they wait to qualify for the state pension. After the change, employment rates in the fifth most deprived local areas increased by 13 percentage points for women and 10 percentage points for men – compared with increases of just 4 and 5 points, respectively. percentage points in the fifth most prosperous regions.
Renters are more likely to stay and work than landlords, and those without a degree are more likely to do so than those with college degrees, research shows that financial need is driving them to make decisions. .
According to the IFS, most people who delay retirement are likely to be better off financially, even if they want to stop working earlier and have more leisure time. That’s because they are mostly full-time workers, earning more than their lost pension income.
Jonathan Cribb, a deputy director at IFS, said this shows there is “an unmet desire for many states approaching pension age to be able to work part-time, or be more flexible than they currently are. doing”.
More than 90% of those affected by the pension age increase have not changed their retirement plans, the IFS said. The majority still retire before age 65, either because of health problems or because they can afford it, while a significant minority choose to work longer.
But a smaller group – including 5,000 unemployed and 25,000 unable to work due to health reasons – have been particularly hard hit, the IFS said, because they are eligible for help through the welfare system is much less than theirs if eligible. for the state pension.
Andrews said this shows the government needs to “seriously put in place meaningful supports to help those out of work in their 60s return to paid work”, so that further increases in the state pension age are required. does not “add further harm to those already disadvantaged by an established labor market”.