Older workers can be the key to economic growth
Over 700,000 people may retire each year – helping them stay at work means more income to businesses and individuals
Working just one year longer would add 1% to economic growth for the nation
I am delighted to have been appointed as the Government’s Older Workers Champion. Having worked on the issues surrounding rethinking retirement and extending working lives for many years, I am delighted to be able to play a more direct role in this social revolution that is already underway. I believe passionately in the value of staying in the labour market, ideally part-time in later life, and see this as an all-round positive development for society.
Individuals will have higher incomes and will therefore be able to afford better pensions. A continuing income stream also means that their pensions won’t need to fund as lengthy a period of non-earning in later life. Instead, those who go on working – whether full-time or part-time – will increase the potential growth of the economy as well as continue to be, and feel, valued. Too many people retire when they are still capable of making a strong contribution to society and to the workforce. The talents and experience accumulated throughout working life don’t suddenly stop being valuable at the age of 60 or 65.
Nobody should be forced to keep working, but equally, those who can benefit from staying economically active should be encouraged and enabled to do so. At each age from 50 and older there are at least 700,000 people who may stop working every year. To put this in context, less than 200,000 immigrants come in to the UK each year. Retirement means mean lost income to many individuals, both now and in future, and lost output to the economy. As well as the financial implications, though, those who have already retired often miss working, not just because they have such reduced incomes, but also because they miss the social interaction, daily structure and positive feelings that derive from work.
Employers often have ageist attitudes which mean they fail to make the most of the knowledge and skills of their workforce, and challenging these attitudes will benefit businesses as well as employees. The number of over 50s will be soaring in the coming years, and it is vital that we ensure they have opportunities to earn and save more, as well as continuing to contribute to the growth of the economy as a whole.
For many years, I have been highlighting the need to consider retirement as a ‘process’ rather than an ‘event’ and to enable people to leave the labour market more gradually, by enjoying a period of part-time work before stopping altogether. Until now, retirement has often been an irrevocable step; a more gradual move will make the transition easier to manage both financially and personally. But most people are no longer ‘old’ in their 60s. Societal attitudes are changing and staying at work for longer needs to reflect those changes and become the norm. Just as we have redefined work for mothers with young children over the past 30 years or so, we can now redefine work for older people.
This will bring benefits to the individual and also to businesses who retain experienced staff for longer. In addition, all of society will benefit from the additional production and income generated in the economy as well as from the health and wellbeing benefits that working longer can bring. If everyone works just one year longer, this would boost UK economic growth by at least one per cent – which is at least an extra £16billion a year. That can offer a permanent boost to economic activity and will help both older and younger generations. It’s a win-win, let’s help make it a reality.