The Solution to an Ageing Population? Re-Think Retirement

18/07/2012 17:42 BST | Updated 17/09/2012 10:12 BST

The great news is that many more people are living longer nowadays thanks to major advances in health and medical care. But, of course, this means there is now a challenge ahead. As a nation, we need to completely change our attitude to what is 'old', and by doing so we can also change our attitude to what a fantastic resource older people are; they're not a drain on our future, they are potentially really valuable resource in themselves.

Of course we've known about the huge baby boom generation for decades - they were born about 50 or 60 years ago. Medical science has seen such success in keeping people alive longer, so it should not be a surprise that there are more older people now. Many of the illnesses people used to die of, they can now live well with or recover from. That is something to celebrate. The real shame is that politicians failed to prepare people for longer lives properly. Working longer, saving more and keeping active are vital ingredients of managing the ageing population. We need to help older people look after themselves, help younger people appreciate the value of elders and move away from old fashioned stereotypes of old people being not fit to do anything!

There is a whole new phase of life open to us, in our 60s, and even 70s, where most of us will be fitter and healthier than previous generations, and still have many years of life ahead. These are 'bonus years' which most of us can hope to embrace. Of course not everyone will be able to (just as not all people in their 50s now are in good health) but the majority should benefit from these successes.

Nevertheless, we are currently wasting vital resources as millions are not using the skills they've acquired throughout their lives. By embracing and in fact welcoming the opportunities of working during part of these bonus years, we can help boost the ailing economy, reduce reliance on the state and ultimately make retirement more fulfilling.

This would be a win-win for the economy and society - it will help elders have higher incomes and create more jobs for the young. If we carry on as we are, then many older people will stop working, have low pension incomes and reduced spending power, which will stifle growth.

Saga's research shows that many over 50s already want to work past 65. Some 71% would like to work part time rather than retiring and in fact 7% are already working past the age of 70 - and it's not just for the money. Job satisfaction, feeling useful and the social benefits of working are key reasons why people say they want to continue.

When the current concepts of pensions and retirement were introduced, people in their sixties were classed as old. Now many are still fit and healthy into their seventies or beyond. We cannot afford to let them believe they have to leave the labour force altogether if they are not sure they want to. The affordability of the ageing population demands new thinking.

Pension incomes for most people are simply not enough to sustain them through their now longer lives. It is really not sustainable to expect that private pension savings - whether organised by employers or individuals - can guarantee a good income for an ever-increasing length of time. As later life extends, the parameters of pensions need to adjust accordingly. And people need to think about saving for later life care needs too.

If we are encouraged to consider embracing the opportunity of a new phase of life, a phase between full time work and full time retirement - instead of traditional retirement - we could have a better work-life balance working part-time in a fashion and at a pace that suits us best.

Of course employer attitudes and age discrimination in the workplace need to change. Of course, not everyone will be able to stay in the same line of work and some may need to retrain. Of course, the current unemployment situation makes later life working more difficult. However, if we merely think short-term and force older people out of work too soon, ultimately there will be far fewer jobs for younger people. The increasing numbers of retired citizens with disappointing pension incomes will have less money to spend and this will weaken the economy, damaging medium growth and job prospects for everyone.

Just saving more will not be enough to ensure decent income in later life. It's only one part of the picture. Enabling older individuals and wider sections of the population to keep economically active, continuing to generate an income - or even substantial wealth - not just for themselves, but for the country as a whole, is another vital part of managing an ageing population. Lives are changing so attitudes and expectations need to change too.