Workers face retiring at 70 as OAP employment rises

Workers face retiring at 70 as OAP employment rises

People living in the UK are working longer, with men on average retiring later than their current state pension age, statistics from the Department of Work & Pensions (DWP) have revealed.

The average age of retirement has increased for both genders over the past two decades – men from 63.2 to 65.1 and women from 60.8 to 63.6.

The data from the DWP also showed employment rates among people ages 50 or more are increasing.

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Some 71.2 per cent of individuals in the 50 to 64 age bracket were working in 2016 compared with 55.8 per cent in 1984.

Among those aged 65 or more, 10 per cent of people are now working compared with just 4.9 per cent 32 years ago.

The gap between the employment rate of those aged between 50 and 64 and those aged between 35 and 49 has closed between 1984 and 2016.

The gap was 20.9 percentage points 32 years ago but it is now 13.3 percentage points.

Nathan Long, senior pension analyst at Hargreaves Lansdown, said retirement was "hugely personal" and the data did not show the wide dispersion in ages of people leaving the workforce.

He said: “There is some clustering to state pension age, but overall there are a wide range of factors that influence when someone stops working.”

But the DWP data did not highlight the trend towards part-time working among older workers, Mr Long said.

He said: “This increasing flexibility afforded to older workers alongside the abolition of a default retirement age is certainly a factor in the increasing age of retirement."

Tom Selby, senior analyst at AJ Bell, said those who thought retiring at 65 was a "scary thought" were in for a "nasty shock".

He said: “The rise in average retirement ages is only going to accelerate in the decades to come as the state pension age increases further, and the number of people retiring with generous defined benefit entitlements falls away.”

Mr Selby said that if life expectancy keeps going up, many will be facing a retirement age of 70 or older.

Mr Long agreed: “With people living longer, but with insufficient monies being saved for retirement, this trend is only set to continue in the years to come.”

In July, the government announced that the state pension age increase should be brought forward to 68 between 2037 and 2039, due to increases in life expectancy.

Under the current law, the state pension age is due to increase to 68 between 2044 and 2046.

The change to the state pension age will leave 7.6 million people £10,000 worse off, according to analysis by the House of Commons Library.