State pension changes are not the only way to combat the financial problems associated with increasing longevity. Recent legislative changes also include the removal of the default retirement age of 65. In theory, this means people can continue to work for as long as they need to. While this goes some way to solving the problem, it may not be an option for everyone.
Many people will have to leave work early due to “either ill health or the inability for elderly workers to retain their jobs”, says Partnership’s Head of Corporate Affairs, Jim Boyd. “People involved in manual work will be at most risk as the rigours of hard manual work and shift work take their toll and the possibility that employers may not be able to offer them suitable alternative employment.”
While a proportion of people will drop out of the workforce, we will also see an increasing number of people working beyond age 65. Some will continue to work because they want to, but others will do it because they have to. What more can be done to sweeten the bitter pill of a longer working life?
The International Longevity Centre UK (ILCUK) recommends government could consider graduating the state pension (starting it at a lower level and gradually increasing it) or promote existing opportunities more widely, such as deferring the state pension. Research carried out by the ILCUK with Aviva found half of those (55%) polled would support a system where individuals could access part of their state pension early, in return for a lower pension when they retire in full.
But monetary inducements from the government are not enough to support the massive shift towards increased working lives. If people are working longer then employers will need to ensure roles are appropriate for an ageing workforce to combat the issues Boyd mentioned earlier. Chief executive at ILCUK, Baroness Greengross, says innovative working holds the key: “A target based work pattern is one way of incentivising older people, so they have certain tasks they’re asked to do and it’s more flexible as to how they do them.”
In addition, she expects older workers to have a greater say in the design of their jobs. But she adds: “You can’t necessarily do the same tasks. You can’t necessarily go up scaffolding in your 70s, for example. There are management and mentoring jobs. What we’ve tended to do is put people in a job and when they’ve reached 50, they stop being trained for another job. Employers need to go on retraining people so they can go on working in appropriate ways.”
Sources: www.ifaonline.co.uk
