Only half of UK adults are confident they will be able to work into their 70s, despite many people needing to work beyond retirement age due to insufficient savings.
Research from Phoenix Insights found that over three quarters (78 per cent) of workers are confident they could do their job, or one like it, by the time they are 60; however this falls to half (49 per cent) by the age of 70.
For those who aren’t confident about remaining in work, the research found that the main concerns are around physical and mental health, motivation and a lack of support for older workers. A fifth (21 per cent) of this group say they have worries about age discrimination in the workplace.
Retirement ages have been increasing in recent decades due to changes in health, jobs, and pension age eligibility.
People are starting and leaving work later in life but are also living longer than the generations before them. Research from Phoenix Insights, Phoenix Group’s longevity think tank, finds around one in three 65 year olds are classified as retired, thirty years ago this was closer to three in four (73 per cent).
Phoenix Insights modelling suggests around 17m adults are not on track for the retirement income they expect or need, with the saving crisis expect to reach “boiling point” for new retirees in the 2040s.
Combining widespread under saving with an increasing state pension age could mean many more people will have to postpone their retirement to plug gaps in savings. Remaining in work, on reduced hours or full time, has the double effect of reducing the years to fund in retirement alongside the ability to continue to build up pension savings.
But Phoenix Insights says this research shows that not everyone is able to work into their late 60s and 70s. People in their early 60s make up a disproportionate proportion of the total workless population. If current trends continue, there could be an additional 770,000 people aged 60 to state pension age out of work by 2029, totalling 3 million.
The study said that being out of work pre-state pension age is closely linked to rates of poverty. A quarter of all 60-65 year olds live in poverty, and people out of work aged 60-65 are twice as likely to be in poverty as those in work.
As a result Phoenix Insights is calling action to address this growing issue. It says it wants to see a cross departmental government strategy that recognises the challenges and opportunities for over-50s, covering policies around retention, recruitment, training, support and health.
In the workplace it wants to see better promotion of inclusive employment practices such as flexible work, paid carers leave, support for health and wellbeing across workplaces to nurture an age-friendly culture.
The company is also calling for active career management which addresses the employment advice gap and supports career moves, job changes and helps people back into work, ith a focus on lifelong learning and training to close the skills gap and increase adult participation in further education.
It adds that government and businesses should provide better retraining opportunities and age inclusive advertising of green jobs, and for employers to review pay and condition for these roles to attract experienced workers.
Phoenix Insights head of research analysis and policy Patrick Thomson said: “How people enter, stay and leave work has transformed in recent decades. The average retirement age has increased by around five years since the 1990s and more people choose a gradual transition from work rather than having a ‘hard stop’.
In the future, it’s possible average retirement ages will rise further alongside the state pension age rises as people want to continue working longer or feel they need to for financial reasons. In the next five years most defined contribution pension savers will enter retirement with savings below expectations or below an adequate level, and this will worsen to a peak in the early 2040s.
“While people may want to remain in work in their late 60s and 70s, it’s not always possible for some. Huge numbers drop out of work before state pension age and face barriers to re-entering. Without better support for this group to remain in work, an increasing state pension age and under saving creates a perfect storm for worsening later life poverty.”
