The National Association of Pension Funds (NAPF) yesterday (Thursday) released the first results of its new research series ‘Understanding Retirement’.
The research revealed the twenty million people in the 50-70 year old age group have a much more varied experience of retirement than might have been expected. It shows that despite the Government’s ambition to support over-50s in the UK labour market, more than two million 50-70 year old retirees are looking for suitable work but cannot find it.
The changing face of retirement
The research focused on people aged 50-70 and within this age range two distinct groups emerged: those who identified themselves as ‘retired’ (44%) and those who considered themselves ‘non-retired’ (56%).
In the ‘retired’ group, 35% were below the state pension age (65 for men and 62 for women) illustrating that for some people retirement starts before the state pension age.
Conversely, of everyone at state pension age or above, almost one in five (19%) were still doing some paid work – indicating that for many people who are at or older than the state pension age today, retirement no longer means not working.
Retired but looking for work
Among those in the ‘retired’ group who were not working, one third (2.1m people) would like a job that offers some flexibility and is not too physically demanding, but had not been able to find one.
Of the ‘non-retired’ group, more than 30%, or 3.2 million people, are not working, suggesting that many more 50-70 year olds in this group may also be looking for suitable employment.
Making friends or making money
Of the group that identified themselves as ‘retired’ but are still working, almost one third (31%) said they work to make ends meet. The remaining 69% work for a combination of extra money and because they enjoy it.
A lost pension generation
58% of the ‘retired’ group had retired before the state pension age. In stark contrast, only 23% of those 50-70 year olds who are ‘non-retired’ expect to do the same.
Pension provision is noticeably lower among the ‘non-retired’ group with more than one in four (24%) having no private pension and no other savings (nearly twice the proportion of the ‘retired’, 14%).
Members of the ‘non-retired’ group are also half as likely to have a defined benefit pension (19%) and are no more likely to have a defined contribution pension (13%).
Commenting on the research, Joanne Segars, Chief Executive, NAPF, said: “This research shows that retirement has already changed significantly from the traditional image of a gold watch, going on a cruise and happily never working again. The picture is often more complicated and challenging than many of today’s 50-70 year olds ever expected.
“For this age group, which is often generalised as the richest generation in the UK, the reality is many are looking for suitable work to make ends meet but cannot find it. They need jobs that are not too physically demanding and offer flexible working, in many cases to allow them to fit in other responsibilities.
“These jobs are in short supply and high demand, with many groups of people looking for the same sort of opportunities. If the Government is serious about putting the expertise of the over 50s to work then it must urgently develop a plan to make the right jobs available to this age group, who represent one in three of the UK population.
“Many people we spoke with as part of our research expressed a combination of happiness and trepidation at approaching retirement. This cohort will be the first to test the Government’s agenda for Freedom & Choice in pensions. Their experience will be vital in forming pension policy that helps this and future generations.”