Nearly half of over 50s to be in work by 2030

Nearly half of all over 50s will be in employment by the end of this decade as more and more people in their sixties carry on working past retirement age, new research suggests.

While this partly reflects the fact that we are living longer as a society as well as a rise in the age at which one can claim state pension, it is also because some are approaching retirement relatively poorer. 

The over 50s as a group continue to hold the majority of UK wealth in cash, property, pensions and other assets – but those approaching pension age have seen their share of the nation’s wealth shrink. 

Britons aged 50 to 64 now hold 36 per cent of the whole UK’s wealth, down from 42 per cent a decade ago, research by Legal & General and the Centre for Economics and Business Research (Cebr) shows.

This gradual shift in wealth may be pushing them to carry on working to be able to have enough when they retire, according to the report.

The proportion of over 50s still in work has increased steadily over the years: from just 31 per cent in 1992, to 42 per cent last year – and it’s now expected to hit 47 per cent by 2030, a new record high.  

Overall, that’s an increase of 36 per cent over the last 20 years, driven by a substantial rise in the amount of people in their sixties living and working for longer, according to the report. 

Since October last year, both men and women’s state pension ages have risen to 66, but many people keep on working past this milestone. 

The number of people over 50 and in work has increased from 31% in 1992 to 42% in 2020

Some 8 per cent of over 66 are currently in work, typically doing an average of 26 hours a week. 

This number is set to increase to a record 11 per cent, or an estimated 948,000 people, by the end of the decade, according to the report’s forecasts. 

This percentage could increase further if we see additional changes to the state pension age in the next few years. 

At the moment, we know that the next increase will be between 2026 and 2028, when the state pension age for both men and women will rise to 67. 

Retirees on the full flat rate state pension currently get £179.60 a week or around £9,300 a year, if they reached state pension age after April 2016. 

The old basic state pension, for people who reached state pension age before that date, is £137.60 a week, or around £7,200 a year.

The ‘triple lock’ on pensions could be scrapped amid the spiralling costs involved

But more than two million people will not receive either of those full rates, according to recent analysis.  

Moreover, it looks like that the ‘triple lock’ on pensions, which guarantees that the state pension increases by the highest out of inflation, average earnings or 2.5 per cent, could be scrapped amid the spiralling costs involved.

‘People are continuing to work for longer, in order to reach their desired retirement lifestyle but also in response to changes in wealth, State Pension provision and to reflect the fact that we are living longer as a society,’ said Andrew Kail, chief executive of Legal & General Retail Retirement. 

‘This creates a much more challenging hurdle for people to overcome in order to fully retire,’ he added.

‘Gone are the days of ‘carriage-clock retirement’ and we need to make sure people understand the implications so that they can better plan for their future and the extent to which work will play a role in it.’ 

An increase in the proportion of people working until later in life has caused a narrowing of the gap in employment rates between the under and over 50s

While the employment rate of people in their sixties has risen almost twofold in the last two decades – from 23 per cent in 1992 to 41 per cent last year – the percentage of working people under 50 has remain fairly consistent over the years. 

This has caused a narrowing of the gap in employment rates between the under and over 50s.

From 42 percentage points in 1992, the gap shrunk to 35 percentage points in 2020, with a further narrowing to 29 percentage points expected by 2030. 

These demographic shifts in the workforce and changes to the state pension age have also contributed to a narrowing of the retirement age gender gap.

While the average age of retirement entry has risen by 1.9 years for men (to 65), the average at which women retire has increased by 3.6 years (to 64), since 1992.