We cannot allow the inequalities of 2020 to become entrenched in later life
Longer working lives can benefit our individual finances and the economy – but Coronavirus risks setting back the progress we've made.
Our Senior Evidence Manger, Dr Emily Andrews, explains why new figures from the IFS paint a worrying picture about inequalities in retirement.
Coronavirus is exacerbating inequalities on every level imaginable: whether that’s the health issues caused by being locked down in a dilapidated or poorly heated home, the heavy economic hit to those already on low pay, or simply the greater risk of becoming gravely ill borne by those already in poor health.
If these health and financial inequalities become entrenched in mid-life, it is very difficult to close the gap when people move into their 60s, 70s and beyond. Many people who might otherwise have expected good prospects in later life will now struggle.
Today’s new analysis from the Institute for Fiscal Studies (IFS) – the first publication in our two-year partnership – adds new evidence to this picture.
During June and July, the wealthiest fifth of employees aged 50+ were 14 percentage points less likely to be worried about their job security than the least wealthy fifth. The most wealthy, and those on the highest incomes, were the most likely to be working from home – while those at the other end of the wealth and income spectrum were the most likely to be working outside of the home, potentially putting them at greater risk of contracting the virus.
It’s not just wealth inequalities. The analysis finds that people with a health condition or disability that limits their work are 34 percentage points more likely to be worried about their job security than those without. In a separate report, the IFS found that the chance of working in shutdown sectors was much higher among certain ethnic groups – such as hospitality and leisure: older workers from Pakistani and Bangladeshi backgrounds are much more likely to work in shutdown sectors than younger workers from the same background – the reverse of what we see among people from White backgrounds.
There is also some potentially good news here. People age 50+ who are working from home are five percentage points more likely than others to say they are planning to retire later – suggesting that the great flexible working experiment of 2020 is indeed making some workplaces more age-friendly. But not everyone has access to those flexibilities.
People with a health condition or disability that limits their work are 34 percentage more likely to be worried about their job security than those without.
At Ageing Better, we often talk about ‘older workers’ as one group. All workers aged 50 or older are united in certain things: they have many years of experience in or around the labour market, and they are all at risk of facing ageism. There are also many experiences that occur more frequently in our 50s and 60s than at younger ages: more people start dealing with long-term health conditions, for example, and many are faced with multiple caring responsibilities.
But there are also of course myriad of ways in which our experiences at this age differ. Ageism has less bite for a powerful senior manager than a long-term jobseeker. An admin worker faces less daily physical strain than a construction worker. Older women often enter mid-life on a very different career trajectory to men. Even for the same individual, what is needed from work can be very different at age 52 than it is at 64.
That is why we are really excited to embark on this work with the IFS, which will help us understand more about the decisions different groups of older workers are making as they approach the end of their working lives, and how events around the pandemic may be impacting their plans and aspirations. Next week, the state pension age reaches 66 – and the IFS will be looking at how this has impacted both the work and living standards of different groups of older workers (and non-workers).
Longer working lives have the potential to reap benefits for us all – to our individual finances, to our social connections, and to the wider economy. We cannot allow recent trends in this direction to go into reverse. But we also need to understand who is and isn’t getting access to those benefits, so we can properly understand – and then lift – the barriers to fulfilment and work in later life.
Read the Institute of Fiscal Studies' publication: A state pension age of 66 (until 2026 that is) here.