The number of people aged 65 and older who are still in employment has doubled since 2006, according to official figures.
The Office for National Statistics’ (ONS) labour market report, out today (11 September), showed between January 2006 and July 2018 the number of people aged over 65 and in employment rose from 607,000 to 1.26 million.
This means the rate of employment of the over 65s has risen from 6.6 per cent in 2006 to 10.7 per cent in the three months to July 2018.
According to the ONS, the increase in employment in this category was due to changes to the state pensionable age for both men and women, older people’s desire for financial independence and changes to employment laws.
But Kate Smith, head of pensions at Aegon, said the figures could be indicative of more people finding they cannot afford to retire.
She said: "Despite an ageing population, it is interesting to see that more people are reaching retirement age and choosing to remain in work. While many are choosing to transition into retirement, some may find that they simply cannot afford to retire and are having to opt to stay in employment."
She added: "Individuals should look ahead and plan for their retirement years, considering whether or not they want to remain in work past state pension age and working out how much money they will need to live on in retirement.
"The alternative to this is that we may well see the number of those working past retirement age continuing to rise, not out of choice, but out of financial necessity."
The ONS referenced data from The Department for Work and Pensions which showed the mean labour market exit age for men had increased to 65.1 years in 2017, compared with 62.3 years in 1997.
Similarly, the mean labour market exit age for women was found to have increased from 60.8 years to 63.6 years during the same period.
Royal London pensions specialist Helen Morrissey said older workers had lots to offer in terms of experience which can be passed down to younger generations.
She said: "Employers must continue to harness this valuable resource by providing working environments where older workers can thrive."
Scott Gallacher, chartered financial planner at Rowley Turton Private Wealth Management, said the figures were not surprising given the current environment.
He said: "Pension benefits for those retiring now are generally less generous than for those retiring in 2006. This is due to a number of factors but including a closure of defined benefit schemes for many people and lower annuity rates due to lower interest rates and increased life expectancy.
"If people are willing and able to continue working past 65, even on a part-time basis, then it naturally makes retirement funding somewhat easier if there is some continued income into the initial years of retirement."
rosie.quigley@ft.com
