Public Servant Lifestyle

People who carry on working beyond State Pension Age (SPA) appear to be healthier, wealthier and happier, according to new research carried out for the Department For Work and Pensions' (DWP) Age Positive campaign. Working after State Pension Age: Quantitative Analysis - published by the DWP - found that 76% of men and 71% of women who worked beyond the SPA described their health as either 'excellent' or 'very good', compared with only 50% of non-workers.

SPA

The report also found those who continued to work after the SPA were better off financially, with a much higher percentage of workers than non-workers reported they were living comfortably and saving money. But working past the SPA is much more common among those who are still working when they reach the standard retirement age. This suggests it is more difficult for older workers who leave the labour market to re-enter it.

Other interesting findings include:

• Older workers reported relatively high levels of job satisfaction and have a strong attachment to work.

• The decision to continue to work beyond SPA may be influenced by a variety of factors. For some, it was linked to particular household circumstances, for example, a desire to retire at the same time as their partner. Another important incentive was the maintenance, or even improvement, of living standards.

• Many employees who continued to work after SPA had changed their working hours, either by reducing them or moving to part-time work, with the majority remaining in the same job.

• Those who changed employer were likely to move from full-time to part-time work, suggesting that the move could be due to a desire for flexible or part-time working options that were not made available by the previous employer.

• A high proportion of those working were self-employed, although this seemed to reflect later retirement amongst the self-employed rather than any significant shift from employment to self-employment amongst this age group.

Abolition

Pensions Minister Ian McCartney said: "I've have always championed the abolition of age discrimination in employment. Employers who write off older workers at State Pension Age, or refuse to consider more flexible work patterns, risk losing a valuable resource, which may well be snapped up by their competitors. The Pensions Green Paper shows how determined we are to help more people carry on working until they are 65 and even beyond.

"At the moment a wealth of talent and experience in the workplace is lost as people stop working too early. The Green Paper proposes to crack down on discrimination and sharpen incentives to help older people remain in work."

Quantitative Analysis

Following the recent launch of the Pensions Green Paper: Simplicity, security and choice: Working and saving for retirement, the publication of this research highlights the importance of identifying and overcoming barriers to older people's participation in the labour market and on tackling age discrimination.

Further to these findings, research carried out by the Policy Studies Institute and the Personal Finance Research Centre at Bristol University aims to further understand what influences the labour market participation of older people at, and after, SPA.

The main findings of the Bristol report include:

Working After SPA

• Employment rates for women from the age of 60 and men from the age of 65 stand at 8% and 9% respectively.

• Marital status was associated with labour market participation particularly for women, the participation rates of married women were exceeded by the rates for women who were separated or divorced.

• When housing tenure was examined for both men and women, the highest probability of labour market participation was among owner-occupiers with outstanding mortgages on their properties. Tenants were among the least likely to work.

• 40% of non-workers received an occupational pension, compared with 33% among workers. The association between working and lower levels of occupational pension receipt was, however, confined to men. Among men, 67% of non-workers had an occupational pension compared with 53% of working men.

• Having any educational qualifications was associated with working past SPA, and having none was associated with leaving work.

• There were important links between the participation rates of men and women living in couples: 41% of post-SPA working men had working partners compared with just 8% of non-working men. Among working women, 55% of their partners were also working, while just 11% of non-working women had partners at work.

• Participation rates after SPA were not strongly associated with regional unemployment levels. However, the highest levels of post-SPA employment were found in London, especially inner London, and the South East.

Types of Jobs

• Three quarters of men and women working after SPA were in the jobs they had held prior to reaching SPA. This proportion rises for full-time employees but for men working part-time drops to a little over half. Part-time opportunities appeared to be particularly important for post-SPA workers, the largest groups of employed and self-employed men and women worked part-time, predominantly through choice.

• Employer size was important with workers over SPA who were twice as likely as other age groups to be employed in companies with one to 10 staff and far less likely to be employed in organisations with over 50 staff.

• Reaching SPA was not generally associated with deterioration in hourly pay rates once occupational group, employment status, sex and educational achievement were controlled for. However, there was a gap between pre- and post- SPA wage levels among men working full-time.

Dynamics of Retirement

• The best predictor of being in work post-SPA overall is being in work in the period just before. Most factors correlated with working post-SPA worked through this link. Their independent effect on working after 60/65 was much weaker.

• Rates of working were sustained for only a few years after SPA and this only happens for those working in the period just before SPA.

• Men working past SPA reported financial situations that were superior to those of non-workers. Some 59% of men working past SPA said they were 'living comfortably', compared with 40% of those not working (and aged 65-75). Among women, 87% of workers over SPA said they were either 'living comfortably' or 'doing all right', compared with 65% of those women not working. The median incomes of workers were around two-thirds higher than among non-workers for both men and women.

• Some 76% of men working and aged 65-75 described their health over the last years as either 'excellent' or 'very good', compared with 54% of non-workers. Among women, 71%of workers reported a similarly high level of health, compared with 49% of non-workers.

• Half the male workers, and approaching two-thirds of the women, were saving money, compared with around one third of non-working men and women. This could be evidence that they were putting money away for their future retirement, particularly since the proportion of people saving, compared to five years' previously, had fallen for non-workers, but increased for workers.

The Bristol University report is based on secondary analysis of three existing large national datasets: detailed cross-sectional analysis of the Labour Force Survey (2000 and 2001), the Family Resources Survey from 1997 to 2000 and analysis from the British Household Panel Study (covering data from 1991 to 2000).

A summary and copy of the report - Working after State Pension Age: Quantitative Analysis by Deborah Smeaton and Stephen McKay, DWP Research Report Series (no. 182) is available here.

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