Employment rates among both women and men have increased due to the one-year rise in the female state pension age, according to new research by the Institute for Fiscal Studies (IFS).

IFS found that raising the female state pension age from 60 to 61 increased the employment rate among 60-year-old women by 7.3 per cent. This means about 27,000 more women were in work last April than there would otherwise have been. Conversely, 1.3 per cent more women aged 60 were unemployed (i.e. not in work but looking for work).

Significantly, the report also found that employment rates among the husbands of the affected women increased by 4.2 per cent, perhaps, suggests the report, to cover their wives’ lost pension.

IFS research economist and co-author of the report Jonathan Cribb commented: “Increasing the age at which women can first receive their state pension has led to significant numbers of women deferring their retirement, with over half of women aged 60 now in paid work for the first time ever. We also find that some husbands are responding by remaining in work for longer. Taken together, there were 35,000 more men and women in work as a direct result of the increase in the female state pension age – from age 60 to 61 – that occurred between April 2010 and April 2012.

“So, despite the weak performance of the UK economy over these two years, many have been able to limit the loss of state pension income through increased earnings. These results apply only to the first groups affected and how women and men respond may change as the pension age rises further. But this is initial evidence that raising pension ages can have significant positive effects on employment.”

The research, supported by the Nuffield Foundation and the IFS Retirement Saving Consortium, examined data from the first two years since the female state pension age rose to 61 in order to ascertain its impact on labour market outcomes.

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