Over-50s in work to reach record high by 2030

The proportion of over-50s in work is set to reach a record high of 47 per cent by 2030, according to Legal & General (L&G) Retail Retirement and the Centre for Economics and Business Research (CEBR), with a similar trend expected for those working past state pension age.

The report, Working Late: Over-50s and employment, found that the number of people over the age of 50 and in work had increased by 36 per cent in the past 20 years, driven by a “substantial” increase in the number of people in their sixties living and working for longer.

It revealed that the number of people over 50 and in work increased from 31 per cent in 1992 to 42 per cent in 2020, also noting that whilst the percentage of working people under 50 has remained fairly consistent, the over-50s group has continued to grow.

This has resulted in a narrowing of the employment rates between under- and over-50s from 42 percentage points in 1992 to 35 percentage points in 2020, with a further narrowing to 29 percentage points expected by 2030.

The report attributed this trend to people continuing to work into their 60s, as this subset's employment rate has increased almost doubled in the past two decades, recording an increase from 23 per cent to 41 per cent since 1992.

A similar trend was found in relation to those continuing to work past the state pension age, which is currently 66 for those close to retirement, with 8 per cent of people over 66 currently in work for an average of 26 hours per week.

The report also predicted that this will increase to a record-high of 11 per cent by 2030, equal to around 948,000 people, with further increases if additional changes are made to the state pension age in the coming years.

The analysis suggested that one factor motivating the trend towards older people working for longer may be the gradual shift in wealth seen in recent years, particularly in light of the finding that over-50s who have not yet retired are hoping for an income of £23,000 a year.

Indeed, the report revealed that while over-50s as a group have continued to hold the majority of UK wealth in cash, property and pensions, the percentage of their stake has fallen in recent years for those aged 50-64 from 42 per cent in 2008-2010 to 36 per cent a decade later.

However, there has also been a narrowing of the retirement age gender gap, as whilst the average age of retirement entry has risen by 1.9 years for men to 65 since 1992, the average at which women retire has increased by 3.6 years to 64, due to changes in the state pension and the world of work.

L&G Retail Retirement CEO, Andrew Kail, highlighted the research as demonstration of "a significant cultural shift in the world of work", suggesting that more should be done to support planning their retirement income.

He said: "People are continuing to work for longer, in order to reach their desired retirement lifestyle but also in response to changes in wealth, state pension provision and to reflect the fact that we are living longer as a society.

"This creates a much more challenging hurdle for people to overcome in order to fully retire. Gone are the days of ‘carriage-clock retirement’ and we need to make sure people understand the implications so that they can better plan for their future and the extent to which work will play a role in it.

“For those worried about their finances and the implication it has on when they might retire, it is better to be aware of the options available than bury your head in the sand.

"To encourage people to do this easily, Legal & General has a free online course with The Open University, setting out a series of stepping stones to a financially secure retirement and produced a series of podcasts, called ‘Rewirement’, to help listeners get the best from their later years.”

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