Nearly half of all people over 50 will be in work by the end of this decade, as more and more people over 60 continue working past retirement age, new research suggests.
This partly reflects the fact that we as a society are living longer and an increase in the age at which people can claim the AOW, but also because some retire relatively poorer.
The over-50s as a group still hold the bulk of Britain’s wealth in cash, property, pensions and other assets – but those approaching retirement age have seen their share of the country’s wealth dwindle.
Aging workforce: 47% of all over 50s are expected to be in work by the end of this decade
Britons aged 50 to 64 now own 36 percent of the UK’s wealth, down from 42 percent a decade ago, according to research from Legal & General and the Center for Economics and Business Research (Cebr).
This gradual shift in wealth could push them to continue working to have enough when they retire, according to the report.
The proportion of over-50s still in work has steadily increased over the years, from just 31 percent in 1992 to 42 percent last year — and is now projected to reach 47 percent by 2030, a new record.
In all, that’s a 36 percent increase over the past 20 years, driven by a significant increase in the number of people in their 60s living and working longer, the report said.
Since October last year, the state pension age for both men and women has risen to 66 years, but after this milestone many people continue to work.
The number of people over 50 with a job has increased from 31% in 1992 to 42% in 2020
About 8 percent of the over-66s are currently employed, doing an average of 26 hours a week.
The report predicts that this number will rise to a record 11 percent, or an estimated 948,000 people, by the end of the decade.
This percentage could rise even further if we see even more changes in the state pension age in the coming years.
At the moment we know that the next increase will be between 2026 and 2028, when the state pension age for both men and women rises to 67 years.
Retirees on the full flat rate state pension currently receive £179.60 per week or approximately £9,300 per year if they reach state pension age after April 2016.
The old basic pension for people who have reached state pension age before that date is £137.60 per week, or about £7,200 per year.
The ‘triple lock’ on pensions could be lifted amid the rising costs associated with it
But according to recent analysis, more than two million people will not receive either full rate.
Moreover, it seems that the ‘triple lock’ on pensions, which guarantees that the state pension increases with the highest inflation, average income or 2.5 percent, can be abolished amid rising costs.
“People are continuing to work longer to achieve their desired retirement lifestyle, as well as in response to changes in wealth, state retirement provision and to reflect the fact that we are living longer as a society,” said Andrew Kail, CEO of Legal & General Retail Pension.
“This makes for a much more difficult hurdle for people to overcome in order to fully retire,” he added.
‘The days of ‘car clock retirement’ are over and we need to make sure that people understand the implications so that they can better plan their future and the extent to which work will play a role in it.’
An increase in the proportion of people in work until later in life has led to a narrowing of the gap in employment among the over-50s
While the employment rate of people over 60 has nearly doubled in the past two decades – from 23 percent in 1992 to 41 percent last year – the percentage of people under 50 has remained fairly constant over the years.
This has led to a narrowing of the gap in employment among the over-50s.
From 42 percentage points in 1992, the difference has narrowed to 35 percentage points in 2020, and is expected to narrow further to 29 percentage points by 2030.
These demographic shifts in the workforce and changes in retirement age have also contributed to narrowing the gender gap in retirement age.
While the average age at which men retire has increased by 1.9 years for men (to 65), the average age at which women retire has increased by 3.6 years since 1992 (to 64).
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