Pensions - Articles - The rise of a gradual transition to retirement

The rise of a gradual transition to retirement prompts ONS to consider new ways of measuring the ‘dependency ratio’

 Steven Cameron, Pensions Director at Aegon comments on the release: “With improvements to life expectancy, our population is set to continue to age with one in four people projected to be over 65 years old by 2050. But at the same time, age 65 is no longer the point when people move automatically from working to retirement. 

 “An ageing population pushes out the age people are choosing to retire. The pension freedoms and changing attitudes towards work have enabled individuals to adopt a more transitional approach to retirement. More and more people are staying in work longer and gradually reducing their hours. Those who keep working are also contributing to the country’s economy. Indeed many who have stopped working also contribute by providing unpaid care to family members.

 “So it’s arguably long overdue that the ONS should redefine the ‘dependency ratio’. Traditionally this has been a simple ratio of the number of people who are aged over state pension age compared to the number of people aged between 16 and 65.

 “As people increasingly work on beyond traditional retirement ages, we may see a greater number object to being defined as ‘dependent’. As the release points out, it is important to make sure that traditional measurements for evaluating the population are continually examined and adapted if needed so that policy makers understand the true picture and make meaningful decision, particularly on issues concerning the fast evolving retirement landscape.”

 ONS Dependency Ratio

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