State Pension  

Pension age change boosts employment figures

Pension age change boosts employment figures

Changes to the state pension age have contributed to the increase in the employment rate among those approaching retirement.

The latest UK labour market data from the Office for National Statistics (ONS), published yesterday (July 16), showed that more than half of the annual increase in the number of people in work occurred among those aged from 50 to 64 years.

A record high of 32.75m people were in employment up to the end of May 2019, while 1.29m were unemployed, the lowest since 1992.

The employment rate for men was 80.2 per cent, while the rate for women was 72 per cent, the joint highest since records began in 1971.

The employment rate among those reaching retirement age in the 50-64 bracket from March to May was 72 per cent, with 9.1m individuals being in work. 

In comparison, there were 1.3m people aged over 65 in work in the same period with an employment rate of 11 per cent.

Kate Smith, head of pensions at Aegon said: "With more than half of the annual increase in the number of people in work occurring among those aged between 50 and 64 years old, older workers are fuelling the UK workforce. 

"A fixed retirement date is increasingly being replaced by a more flexible attitude towards work and retirement, with many people choosing to combine elements of the two as they get older."

The changes to the state pension age is likely to have contributed to the increase in the amount of older people in work, which is especially true among women who have seen the state pension age increase from 60 to 65.

The state pension age is currently 65 for both men and women. From December 2018 it will rise until it reaches 66 in October 2020 and 67 between 2026 and 2028.

Ms Smith said: "Ten years ago 72 per cent of men and 58.5 per cent of women aged 50 to 64 were employed. 

"Now these employment rates have increased to 76.6 per cent and 68.4 per cent respectively. And the proportion of workers aged 65 years and older has increased from 7.5 per cent to 11.1 per cent in last ten years.

"The changes to the state pension age for women is likely to have contributed to the increase in the employment rate among older women over the last few years and with the state pension age set to rise to age 66 for both men and women by 2020, more people will begin to plan their retirement in line with state pension age increases."

Plans to increase the state pension age for women were first announced in the Pension Act 1995 but these changes were accelerated as part of the Pension Act 2011.

Campaign groups The Women Against State Pension Inequality and Backto60 have claimed these changes were implemented unfairly, with little or no personal notice.

The groups, which are calling for compensation for those affected, have also claimed that changes were implemented faster than promised with the 2011 Pension Act and left women with no time to make alternative plans, leading to devastating consequences.