But former pensions minister warns of ‘unhappy older workforce’ who can’t afford to quit
Around a quarter of retirees return to work, with most of those heading back to the daily grind within five years of retiring, according to a new study.
The research by the University of Manchester and King’s College London also found that men were 26 per cent more likely than women to return to paid work following retirement, while people whose partner still worked were 31 per cent more likely to return following retirement than those whose partner did not work.
Additionally, those with post-secondary qualifications were almost twice as likely to return to work than those with no qualifications.
“The fact that older people with more human capital are more likely to ‘unretire’ suggests that it may be difficult for those in poorer financial circumstances to find paid work,” said Professor Karen Glaser, professor of gerontology at King’s College London and a senior investigator on the study. “This may lead to future disparities in later life income.”
Professor Debora Price, director of the Manchester Institute for Collaborative Research on Ageing and a co-author of the research, added: “This research points to the changing nature of retirement transitions, and the more fluid relationships that people have with paid work around mid and into later life. There are messages here for employers that might want to think about these new demographics, but also for policymakers as it looks like the possibilities to supplement savings or retirement income in later life through ‘unretirement’ are available to a greater extent to the already advantaged.”
And Dr Jill Miller, diversity and inclusion adviser at the CIPD, said: “With our ageing population, and the experience and skills older workers offer, employers need to consider how they can attract and retain the significant talent pool of older workers. Often, simple adjustments to working time or the job role can enable people to continue to contribute to the success of the organisation.”
However, other commentators noted that the research may have uncovered an issue with people financially having no other option than to work in their golden years. Steve Webb, former pensions minister and now director of policy at Royal London, told People Management that although many of those who head back to work after retirement do so because they “miss the stimulation and social contact”, there is a “real danger” that a whole generation of people will simply be unable to retire in the first place because they have failed to save enough into their pension pot.
“If employers do not address this issue they could find themselves with an unhappy older workforce that does not want to work but cannot afford to stop,” Webb said.
Kate Smith, head of pensions at Aegon, added that it is in “employers’ best interests to encourage pension saving and retirement planning”, as what people have saved in their pensions will ultimately dictate when they can retire.
However, the University of Manchester and King’s College London study found that people who reported having financial problems before retiring or were on a low income were not more likely to return to work than those who had no such issues, although those who were still paying off their mortgage were more likely to return to work.
Article on CIPD