It is those in the middle, in terms of wealth, that are most likely to stay in work until they are aged 66, a report from the Institute for Fiscal Studies has found.
Wealthy people are still retiring early while poorer people are forced out of the workplace due to ill health, the IFS found.
The report, published today (November 1), forms part of the IFS's pensions review and is in partnership with the Abrdn Financial Fairness Trust.
It focussed on people aged 55 to 64 in England and found that during the 2000s and 2010s, the employment rate of those in the middle fifth of wealth rose sharply from 59 per cent in 2002-03 to 7 per cent by 2018-19.
This is considerably higher than that seen among the poorest fifth (46 per cent) or the wealthiest fifth (65 per cent).
It found that in 2002-03 the number of those who were retired aged 55 to 64 and retired was similar across the wealth distribution with 20 per cent in the poorest fifth compared with 28 per cent for the wealthiest fifth.
However this all changed in 2018-19 which saw just 7 per cent of the poorest fifth were retired while it remained at 24 per cent for the wealthiest.
The report found that many of the poorest said they were out of work for health related reasons - 39 per cent of the poorest fifth in 2018-19 who were not in the workforce but not retired were mostly permanently sick or disabled.
However the report also found that wealthy people in their early 70s are "disproportionately likely to be in paid work".
Among people aged 70-74, the employment rate is 15 per cent for the richest fifth, compared to 11 per cent for the middle and 6 per cent for the poorest fifth.
This confirms existing research that found those beyond state pension age often continue working because they enjoy the work or to keep active, rather than for financial reasons.
Author of the report and director at IFS, Jonathan Cribb, said: “As some in their late 50s and early 60s accumulate high levels of wealth, they take the chance to retire early. In contrast, the poorest in this age group often stop work for other reasons, most notably poor health, and spend long periods on state benefits.
"One of the most remarkable changes of the last 20 years has been the big increase in the numbers of people on average levels of wealth who carry on working until their mid 60s, and this is not simply due to increases in the state pension age. These people often don’t have the financial security to retire – for example many have an outstanding mortgage."
Mubin Haq, chief executive of the Abrdn Financial Fairness Trust, said: “Twenty years ago, retiring early was fairly similar across all income groups.
"Increasingly, it is the wealthiest who are able to take advantage of this privilege, with early retirement plummeting for the poorest. Instead the latter face high levels of being locked out of the workforce, mainly as a result of disability and sickness.
"The reduced ability to work in the years before retirement is a major concern. Not only are social security levels inadequate, resulting in high levels of hardship, but being out of work reduces the ability of this group to save towards a private pension.”
tara.o'connor@ft.com
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