New research raises concerns for State Pension age decisions and the uncertainty surrounding the triple lock guarantee, as the average number of hours worked by older employees in the UK drops.
Recent Age UK analysis finds that, despite the widely reported increase in employment rates for older workers since the 2008 recession, the more hidden flip side is that the number of hours worked has declined since then.
The concern is that, if policymakers only look at the headline employment rate for older workers, they risk drawing too rosy a conclusion about how easy it is for older people to stay in well paid, secure work, whereas the reality for many is far less positive. This is especially pertinent now, as the Government responds to John Cridland CBE’s independent report into State Pension Age, published in March.
Using new analysis, Age UK’s report looks beyond the positive headline employment figures for older workers, examining in more detail how the number of hours typically worked has changed since before the 2008 recession and aiming to uncover more about how the labour market has really developed for older workers. The Charity argues that, whilst it is correct to say that the employment rates for older workers have improved in recent years, the pattern of hours worked is far more complex and less reassuring than is often portrayed.
The study finds that the weekly working hours for a typical man aged 60 to 64 had dropped by 8 hours, which is over 22 per cent. In the 50-54 age group, there was a 29 per cent decline in average hours worked each week since the 2008 recession. For women aged 50-54 there has been an 18 per cent drop, equating to 29.3 to 24.1 hours.
A reduction in hours of working could, of course, be a positive sign if it reflects the fact that older workers are choosing to gradually scale down their hours, for example to help them juggle other responsibilities. However, previous Age UK research suggests it is more likely to be driven by negative factors, including the rise of insecure employment.
The Charity points out that, if older workers work fewer hours, they are likely to earn less. This is a concern because it will make it harder for people to maintain their standard of living until they reach their State Pension Age, and harder to keep putting money aside to help them enjoy a comfortable retirement once they stop working.
Caroline Abrahams, Charity Director at Age UK, said: “It goes without saying that if you work fewer hours you will earn less, and for older workers who are compelled to do less work than they would like, it could make it a lot tougher to withstand any rise in State Pension Age, let alone have any spare income to save for their retirement.
“When the Government responds to John Cridland’s independent report into the State Pension Age, it is really important that Ministers look beyond the headline rate of employment of older workers at what is actually going on for millions of people in their fifties and sixties who are struggling to get and keep the secure, well paid jobs they want and need.
“As John Cridland himself advised, the Government needs to do more to enable those who can work longer to do so, for example, by improving re-training opportunities, and by increasing the practical and financial support on offer for carers and people with severe health problems who are unable to get back to work.
“Looking ahead, we also think it is crucial that the State Pension continues to retain its value to give people more financial security so they can look forward to later life with confidence, not fear. For example, research has shown that abandoning the triple lock would significantly reduce the chance that someone with low earnings can retire with an adequate income.”
Age UK is urging older people with employment issues to visit www.ageuk.org.uk/work-and-learning/looking-for-work/ or call its advice line on freephone 0800 169 65 65.