Centre for Ageing Better
15 May 2020
The idea of leaving work for good in your 60s to live off a pension made sense in an era when we were not expected to live more than a few years beyond retirement.
But today some of us can expect to live another 20 years or more after retirement, and for the lucky ones much of it in reasonably good health.
The age is fast approaching where the idea of retirement previous generations have been used to needs to be – well – retired. New research by BritainThinks, commissioned by Aviva, published last week suggests that many people’s idea of a post-work life of comfort and ease is not met by the reality, resulting in feelings of disappointment and having to scale back aspirations. Some people are working later to boost their retirement income or to maintain a lifestyle they could not afford otherwise. Those people who are providing unpaid care to a partner or relative were particularly hard hit, finding their own retirement finances derailed either because they had to give up work, paying out for the costs of care, or their inheritance being spent down on care costs.
But the age of no retirement doesn’t mean working until we drop. It does mean thinking differently about how and when we stop paid work and what we can do to increase our chances of a financially secure, active and fulfilling later life. The key of course is preparing and planning.
Currently, many of the 650,000 people in the UK who turn 65 each year choose to retire from their full-time jobs around this time, yet many receive no guidance or support. That’s almost 2,000 people a day going through a major change in their lives, many of whom feel unprepared and unsure about what they will do next. All too often, people do not give thought to what kind of later life they want until retirement is imminent. This is too late. And perhaps people don’t even realise that there’s no legal obligation to retire any more.
In our research into Later Life in 2015 we heard stories of people who had found retirement very difficult. James, one of the people we identified as the ‘worried and disconnected’, worked as a long distance HGV driver until he was 71. While he did this in order to earn extra money, the additional benefits were not lost on him, and he spoke of how much he enjoyed doing something useful and getting out of the house. I was recently chatting with Drew, an active man in his mid-70s. He declared he never wanted to retire, particularly if it means “Golf, gardening and grandchildren”. For him, the secret to a happy later life is to keep active and he certainly does that. His skills as an architect are shared with children on projects including building a model of an ecological city and creating a mural representing the history of their community.
Currently, many of the 650,000 people in the UK who turn 65 each year choose to retire from their full-time jobs around this time, yet many receive no guidance or support.
These experiences, and those of many others who help inform our work, reinforce our view about the importance of laying the foundations for later life in mid-life. Much of the support available is focused on financial planning. With new pension freedoms and the decline in defined benefit pensions, this support and advice is increasingly important.
But preparing for the age of no retirement means considering a much broader range of issues in advance of stopping paid work. People who have worked full time for much of their lives and then retire may find themselves at home with very little to do and feel they lack meaning or purpose in their lives. They may become less active physically and mentally and lose the social connections they enjoyed through work.
Some will react with horror at the suggestion that retirement is a thing of the past. But we need to accept that working flexibly later in life is not just a financial necessity for some, but if the work is fulfilling and supported by employers, it can actually improve people’s quality of life. Work can give a sense of purpose, add structure, sustain social connections, and provide opportunities for learning and new experience. All these elements are as important in later life as they are for people of any age.
How can we ensure people like James are supported to manage retirement more successfully and to have a greater chance of enjoying their later life? It is important to build and maintain connections outside work, which will endure beyond formal retirement. These may become the foundation for part-time or voluntary work and community engagement, putting skills and experience to good use. There may be an opportunity to start a new business, or become self-employed. A more local job, reducing commuting time, or work that is less physically demanding, may also help to extend one’s working life.
We recently formed a new partnership with the Calouste Gulbenkian Foundation, the international foundation committed to long-term improvements in wellbeing. Together we will support the development and testing of innovative new approaches to pre-retirement support designed to help a range of people successfully manage the transition from paid work into later life. Our ambition is to make sure that there are fewer people like James and more like Drew. More people who feel positive about later life, are active and connected, feel their lives have meaning and purpose and who are financially secure.
If the age of no retirement is coming, we all need to prepare, not just financially, but in thinking about how we will cope with major life changes, and stay happy and healthy. Employers need to help us continue working longer if we want to or need to and to value unpaid caring and community work alongside paid work. Government needs to take much more radical action to support more people to remain in fulfilling work for longer and to ensure future generations are financially secure in later life. As the independent review into the state pension age gets underway under the leadership of Sir John Cridland, there is an opportunity for government to take a fresh look at retirement. Together we need to plan and prepare for our older years, and build a society where everyone can enjoy a good later life – retired or not.