Pensions - Articles - Comment on older workers in the labour market

Stephen Lowe, group communications director at Just Group, commented on the latest official employment figures released that highlight the strong rise in the number of older workers since 2006 but that success hasn’t been so pronounced recently.

 “It is positive to see the figures showing a rise in the number of older workers although we must be cautious because gains in the last three years have been a case of two steps forward, one step back.

 “At the start of 2015 the employment level for over 65s was just over 1.2 million compared to 1.26 million today. The underlying employment rate in that time has fallen from 10.8% to 10.7% indicating that only one in 10 over 65s are employed, a figure that has barely budged for five years.

 “In the three years prior to 2015 there was a rise of nearly 300,000 in the number of workers aged 65 and over, a rise in the employment rate from 8.8% to 10.8%, which shows the relative weakness of growth more recently.

 “The number and level of employment among those aged 50-64 shows a much stronger positive trend, entirely as expected given the equalisation of State Pension age that has impacted on millions of women since 2010.

 “The stalling in employment for the older age group over the last three years does stand out because strong gains were expected. It also seems to have coincided with pension freedom rules that could mean some people may extract larger amounts of pension cash to boost their income at retirement rather than working later. That could be through choice or because they are finding employers hostile to taking on older workers.

 “We know from last week’s Financial Conduct Authority figures that nearly a third of those who are 65 and over taking pension money via drawdown are withdrawing at a rate of more than 8% a year and another 17% of this group are taking between 6-8% a year. Overall seven in 10 of this age group are taking more than 4% which is a higher level than many pension actuaries believe is sustainable. People need to think carefully because pension money taken early means there is less available when they are older.”

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