Rise in the number of Brits working later in life
On average, men stopped working at 65.2 in 2020, up from 63.3 two decades ago. However, the current average age of exit is lower than it was in 1950 (67.2 years old), but similar to data from 1970 (65.4 years old).
For women, the average age of exit from the working environment comes in at 64.2, up from 61.2 years back in 2000.
The statistics from the Department for Work and Pensions (DWP), also revealed that the employment rate for workers aged 50+ is on the rise.
For workers aged 50-64, the employment rate increased from 55.8% in 1984 to 72.5% in 2020.
For those aged 65 and over, the employment rate his risen from 5% in 1984 to 11.4% this year.
DWP added that the employment rate gap between those aged 50 to 64 and 35 to 49 is closing. In 1984 the employment rate gap was 20.9 percentage points, narrowing to 12.7 percentage points in 2020.
Of the 2.1 million 50 to 64 year olds who were not in work between April and June 2020 and who had left their last job at some point in the last eight years, 37.6% cited ‘retirement’. ‘Health’ is the second largest reason given at 20.1%, 15% said they were made redundant or sacked, followed by 8.7% who said they were ‘looking after home or family’.
‘Pension money needs to work as hard as possible’
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said while people are working longer, they can’t rely on this to make retirement plans add up.
She said: “Working into our 60s or 70s is partly a natural function of the rising state pension age, and in many ways it’s no bad thing. There’s no reason people should walk away from doing something they love for a reason as arbitrary as age. Plenty of people are finding a balance that suits them, with over a fifth of those aged 60-64 working part time.
“It’s easy for younger people to naturally assume that as the state pension age rises further, they’ll simply retire later. They also see it as a solution to the challenge of putting more than the minimum away for the future at a time when their incomes are lower and life is horribly expensive.
“But life has a habit of getting messy and complicated. Among those aged 55-64 who aren’t working, one in five left their last job for health reasons and almost one in ten to look after a family member. Meanwhile, 15% were made redundant or sacked.”
Coles added that the health crisis has raised this risk further as older people have been far more likely to have been furloughed than any group (other than 16-24 year-olds).
“They’re also the most likely to be classed as ‘temporarily away from work’. Over time both of these could feed into higher redundancies among older people”, she warned.
She added: “It’s not safe for any of us to assume we’ll be able to keep working through our 60s and into our 70s, so we need to protect ourselves from the risk that we have to stop work earlier than we’d planned. This means paying whatever we can afford into our pension, as soon as we can afford to do so. We also need to get to grips with what happens to money that we put it into our pension, so we can be sure it’s working as hard as possible for us.”