Older workers driving increased employment figures

Written by Jack Gray
12/06/2019

The rising level of employment is being driven by older workers as state pension age changes, improved life expectancy and transitional retirement’s growing popularity take effect.

The latest figures from the Office for National Statistics (ONS) revealed that the number of people in work increased by 357,000 between February and April 2019.

Workers aged over 50 were by far the largest contributor to the increase, with employment figures from that age group increasing by 305,000, including 80,000 over 65s.

AJ Bell senior analyst, Tom Selby, commented: “When you dig beneath the headline figures it becomes clear the UK’s jobs ‘miracle’ is in fact almost entirely driven by older workers.

“This will at least in part reflect state pension age increases, with women seeing their state pension age rise to 65 during 2018.

“In addition, the transition towards a state pension age of 66 began at the back end of last year, pushing back the state pension age of the first cohort affected by up to three months.

“Improvements in healthcare have also helped drive rapid increases in average life expectancy over recent decades, meaning older people are now healthier and more active than ever before. For many, working into their 60s and beyond, whether full or part-time, is a choice which allows them to enjoy a better lifestyle in their later years.

“However, there will be others – particularly those in physically demanding jobs - for whom working beyond state pension age is a necessary burden as they have failed to save enough to retire.”

The increase was partially attributed to the increase in state pension age for women, from 60 to 65, which has resulted in fewer women retiring before they reach 65.

Commenting on the findings, Aegon pensions director, Steven Cameron, said: “The figures also show that the employment rate for women is the highest on record. The significant increase in the state pension age for women continues to have a major bearing on this, particularly in the 50-64 age band.

“The figures also show a general trend towards continuing to work into later years. For males and females combined, the rise in employment was highest for those age 50-64 (225,000) and increased by 80,000 for those above age 65 compared to the previous year.

“Generally, we are seeing a trend towards people adopting a more phased approach to retirement as they work longer and transition gradually into retirement.”

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