Over 50s ‘require greater choice and control over work and retirement decisions’

Drawing together the findings from twelve different research projects on the transition between work and retirement, the report notes that despite the fact that people are living longer, they are also quitting the workforce at a younger average age (although not necessarily at a time of their own choosing). Since people over 50 are set to become an increasingly important economic resource as the supply of younger workers declines, it argues that government and employers need to change their attitudes to older workers and the contribution they can make.

It also warns policy makers against adopting one-size-fits-all prescriptions as more post-war ‘baby boomers’ approach retirement age. As the JRF research programme demonstrates, the circumstances and aspirations of people over 50 vary widely. Some, but not all, would benefit from retiring later. And since money considerations tend not to be the main reason behind their decisions to stop working, it is unlikely that a simple policy of financial incentives to encourage later retirement would do much to alter behaviour.

Specific research findings highlighted in the report are that:

• Many workers leaving jobs before state pension age have little option about the timing of retirement. Those in professional and managerial jobs tend to enjoy greater choice and control over how and when they leave the workforce than those in less privileged occupations.
• People’s retirement preferences are influenced primarily by health and family circumstances, combined with the view they take of their job. Financial factors are most often felt as a constraint, determining whether retirement at a preferred time is really affordable.
• Almost as many people who leave their career jobs before retirement age can be found working part-time, or in temporary or self-employed ‘bridge’ jobs a year later, as are fully retired.
• The most attractive and lucrative ‘bridge’ job options, such as consultancy work, tend to be taken by men who were well paid and well qualified in their previous career. Women more commonly take up part-time work after leaving their ‘main’ career, and frequently at lower rates of pay.
• A high proportion of men and women workers over 50 have caring responsibilities for older relations, but this does not typically lead them to give up work. Nevertheless, as the pressures to continue working beyond retirement age increase, there is a risk that the availability of informal, family care will diminish, putting professional caring services under extra strain.
• Employers have only just begun to adopt policies to encourage older workers to stay in work, and to avoid wasting their talents. Training and career development activities remain skewed towards younger workers.

The report argues that any financial incentives introduced to encourage later retirement will achieve little unless other barriers to older people staying in the labour market are removed. These include not only age discrimination by employers, but also negative attitudes to work among older workers themselves that leads them to feel undervalued and that they have little left to contribute.

Another barrier identified by the research is a lack of opportunities for many workers to adjust their working hours or terms of employment as they grow older – partly through fear of losing pension entitlements. The report concludes that employers and government could both do far more to promote flexibility and increase the options for older workers who do not want to exchange their full-time careers for total retirement.

Donald Hirsch, Special Adviser to the Joseph Rowntree Foundation, said: “The Government and society have become much more open to the idea of ‘work-life balance’ in the case of parents and young children. This idea needs to extend more clearly to include older workers, many of whom have caring and other family responsibilities. A first step would be to extend legislation so that all workers have the right that was recently given to parents with young children to ask their employers for part-time and other flexible working options. Another key task will be to make work more worthwhile for older people, with opportunities to learn and to work in new ways, to the mutual benefit of individuals and the economy. What will not work is simply to create financial ‘incentives’ to work longer. For example, if we were to delay pensions until 70, without a huge change in current working patterns and opportunities, the result for many poorer people would simply be to prolong out-of-work poverty.”

He added: “The reality revealed by the JRF research programme is that some older workers would like the option to pursue their career for considerably longer.

Others are delighted to leave work as soon as they can, while a third group would regard a switch to self-employment or part-time work as the best option and halfway-house.”

Financial circumstances of early retirement
Results from one of the individual Transitions over 50 research projects –also published today – emphasise the differing experiences of people leaving work. Sue Arthur of Natcen, the National Centre for Social Research, found from in-depth interviews with people in their 50s and 60s who had left work that while some left willingly and had time to plan their futures, others had retirement forced upon them

Sue Arthur said: “Those with the least choice and control tended to experience the greatest financial difficulties. An unplanned exit from work could cause considerable extra hardship and seriously upset their financial expectations for the future.