THE BLOG
14/06/2012 20:07 BST | Updated 14/08/2012 06:12 BST

Why We Need to Take Another Look at Older Employment

If the government wants to realise its agenda of extending working lives, it must make working past retirement age a realistic option for people across the labour market. Too many older unemployed are not given the support and training they need to find re-employment - one out of two is long-tem unemployed, higher than for any other age group.

More people are working for longer. One in eight people now work past their retirement age, up for one in 12 in 2000 according to new stats from ONS. This is good news. Working for longer is to be welcomed at a time when people are living longer, healthier lives. But before we congratulate ourselves on supporting longer working lives, two important factors need to be taken into account.

Firstly, gender counts. Nearly two out of three of the 1.4m older people in work are women. Across the age profile, female participation has been going up for quite some time so we would expect this trend to be reflected within older age groups. But there is another factor at play. The UK has a relatively low female state pension age (SPA). At 60, this is well below the average of the OECD set of countries of 63, and lags far behind our own male SPA of 65. Coupling this low entitlement age with longer healthy life spans and ever stronger female labour market attachment, it is not surprising that more women stay in work past 60. A true test of whether the UK is actually any good at supporting older women in work will be the 65+ employment rates after the female SPA hits 65 in six years time.

Secondly, some people are getting left behind. Men who work past SPA tend to be in highly-skilled roles and a significant proportion are in some form of flexible working arrangement such as self-employment or part-time work. This suggests that it is people in particular types of jobs that are staying on in the labour market, and that it is the low to middle income group - who are typically in lower skilled jobs and have less access to flexible working options - that are being left behind. In fact, this begins before 65. Low to middle income earners are more likely than higher earners to be unemployed or out of work due to poor health before reaching the state pension age. Though for some, this is bound to be a matter of choice - higher-skilled jobs tend to be of better quality - for others it is also a matter of opportunity.

For low to middle income people, working in their fifties and sixties can be critical to their financial security. The relatively weaker labour market attachment of this group (compared with those on higher incomes), and their lower salaries, means they tend to have smaller occupational pension pots. Private savings levels are also low: low to middle earners tend to struggle to save yet it is at this time of life that people do the bulk of their saving for retirement. Not only does this increase the benefit of working in older age, but it also means low to middle earners are less resilient to shocks that take them out of the workplace, like redundancy or unexpected illness.

If the government wants to realise its agenda of extending working lives, it must make working past retirement age a realistic option for people across the labour market. To do this, older people need the option of more flexible working arrangements and, for those with health problems, better condition management in the workplace so older people are not forced to leave their jobs due to illness. Too many older unemployed are not given the support and training they need to find re-employment - one out of two is long-term unemployed, higher than for any other age group. Better support is needed to get them back into work. With pension ages already rising, the time to act is now.