Article date: 23 September 2015
- Almost a third of adults employed during Q1 and Q2 2015 were aged 50+
- The number of over-65s in work has grown by 33% since the Default Retirement Age ended in 2011 – the fastest growth rate of any age group
- Since 2011, 1.76m more adults are now in work - almost half (45%) are aged 50-64 while 16% are aged 65+
- Average monthly incomes rise by 26% from 2011 to 2015
- One in five (22%) say establishing a new routine is the hardest part of retiring
Over-50s are making their biggest contribution to the UK workforce since records began with many significantly boosting their incomes and overall savings, analysis from Aviva shows.
A review of Aviva’s Real Retirement research since 2011, along with data from the Office for National Statistics (ONS), provides a clear picture of the overwhelming contribution the over-50s are making to working life in the UK.
ONS figures show a record 302 in every 1,000 adults employed¹ during Q1 and Q2 2015 were aged 50+ in comparison to just 213 adults in every 1,000 employed in early 1992, representing an increase of 42%.
Meanwhile, the total number of 50-64s in work in Q2 2015 reached a new high of 8.24m. This is in part due to the changing demographics, including the baby boomer generation now all aged over 50, and that people are generally living longer. However, this number has also been helped by the abolition of the Default Retirement Age (DRA) from 1 October 2011, which meant employers could no longer force their staff to retire at 65 on the grounds of age alone.
Since then, employment among over-65s has also grown significantly, up by 33% from Q3 2011 – the final quarter before the DRA ended – to Q2 2015. This is the fastest growth rate of any age group and compares with a 6% rise in the total number of working adults across all ages.
The second fastest growth rate (11%) was among 50-64s, which suggests the number of working over-65s will continue to rise in the years ahead. Of the 1.76m extra working adults in Q2 2015 compared with Q3 2011, 45% were aged 55-64 (1.07m) and a further 16% were aged 65+ (285,163).
Table 1: Growth of employment by age group since the end of the DRA
|Age group||% employment growth since Q3 2011||Actual employment growth since Q3 2011||Total number employed in Q2 2015|
Source: Aviva analysis of ONS UK Labour Market statistics
Jobs growth helps over-55s’ finances improve – but fear of retirement has spread
Aviva’s Real Retirement research, which has tracked personal finances among over-55s since 2010, suggests this period of growing employment has contributed to an upturn in many people’s financial fortunes in later life. Median monthly incomes have risen 26% from £1,091 in Q3 2011 to £1,376 in Q2 2015, while typical saving and investment pots have more than doubled from £7,969 to £17,590.
At the same time, over-55s’ average debt has dropped across various types of unsecured borrowing. The average credit card debt has fallen 15% from £916 in Q3 2011 to £775 in Q2 2015; average personal loans have reduced 25% from £677 to £509; and average overdrafts have dropped 40% from £157 to £94.
Aviva’s data also indicates that work has become more important to people’s sense of financial security in later life, particularly among those aged 55-64 and approaching the former Default Retirement Age. Just 5% of this age group saw retirement as a threat to their living standards in Q3 2011, but this more than doubled to 11% in Q2 2015.
Appeal of paid or voluntary work in retirement grows
The appeal of paid or voluntary work in retirement grows as people near the end of their working lives. While 13% of over-55s who are not near to retiring look forward to this type of activity in retirement, this jumps to one in five (19%) among those near to retiring.
While budgeting money is the most difficult aspect of retirement among those who have retired (23% agree), 22% say establishing a new routine without the structure of work is the most difficult aspect.
One in ten (10%) say stopping work is the hardest part of retiring, while 7% have the most difficulties finding a meaningful, worthwhile replacement for work.
Clive Bolton, Managing Director, Retirement Solutions, Aviva UK Life, said:
“With more over 50s in the workforce and with people living longer, it's important that employers really consider how to get the most out of their more experienced employees. There is no mistaking the fact that the over-50s have been a major contributor in the growth of UK employment since the recession. Four years on from the end of the Default Retirement Age, many people’s careers have been extended into what past generations would once have considered uncharted territory.
“More older workers are also good for the economy, increasing overall productivity (GDP), as well as increasing tax revenue. This will undoubtedly help in closing the fiscal deficit as well as raising personal savings levels.
“And financial factors are clearly fundamental to changing patterns of work. It is no coincidence that the uptake in jobs has coincided with improving fortunes for the over-55s. People are living for longer and their savings need to last the distance, so opportunities to earn in later life can help to fund a more comfortable retirement.
“At the same time, there are other motives at play beyond the appeal of a monthly salary. Many careers used to have a clear cut-off point, but the appeal of paid or voluntary activity during ‘retirement’ shows the lines are now well and truly blurred, as people seek out ways to stay physically active and mentally fulfilled.”
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The Real Retirement Report is designed and produced by Aviva in consultation with ICM Research. The tracking series referenced above has been running since 2010 and totals 24,534 interviews among the population over the age of 55 years. For the latest wave of tracking data (Q2 2015), 1,198 people over the age of 55 were interviewed. All monetary amounts have been rounded to the nearest £1, therefore percentage changes may not tally exactly in some instances.
ONS data is taken from the latest UK Labour Market Statistics, published here on 12 August 2015.
A median is described as the numeric value separating the upper half of a sample, a population, or a probability distribution, from the lower half. Thus for this report, the median is the person who is the utter middle of a sample. All figures in this release are medians unless otherwise specified and are referred to as ‘typical’ rather than ‘average’ (mean).
A mean is a single value that is meant to typify a list of values. This is derived by adding all the values on a list together and then dividing by the number of items on said list. This can be skewed by particularly high or low values.
¹ People in employment include employees, self-employed people, unpaid family workers and people on government supported training and employment programmes. Unpaid family workers are people who work in a family business who do not receive a formal wage or salary but benefit from the profits of that business.
Notes to editors:
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