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 employed 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).
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.
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.”
Full press release on www.aviva.co.uk