Pension ages in the UK are rising from the traditional 65 for men and 60 for women, as people live longer. But why are some working past these ages, and is this good for their well-being? Dr Giorgio Di Gessa from King’s College London and colleagues have investigated why some work beyond state pension age and how this decision affects their well-being.
Figures from the Office for National Statistics show that almost 1.2 million over-65s are in work, an increase of nearly 50 per cent since the Default Retirement Age was banned in 2011, i.e. since when employers can no longer make staff retire when they reach State Pension age (SPa).
With so many older people working past SPa, and with UK policies designed to extend working lives (by 2020, for instance, the SPa will have risen to 66 for both men and women in the UK), it is important to understand why so many people continue to work, and whether this affects their well-being. Do they work because the enjoy it and see this as an opportunity to keep active, or is it because they need the money? And does the reason to keep working affect their well-being?
Data and what we were interested in
Using information on more than 1,800 people from the English Longitudinal Study of Ageing, we looked at the employment status and quality of life of men aged 65 to 74, and women aged 60 to 69. After those ages few men or women worked.
Participants in the study were asked why they were still working beyond SPa. Reasons included because they ‘enjoy working’; to ‘keep active and fit’; because they ‘could not afford to retire earlier’; or to ‘improve their pension/financial position’. They were also asked a battery of questions about their quality of life (known as the CASP-19 scale), which were then coded in such way that higher scores indicate greater well-being. Examples of items are ‘My health stops me from doing things I want to do’ and ‘Family responsibilities prevent me from doing what I want to do’.
Around a quarter of the women and 15 per cent of the men worked past pensionable age. Of these, the majority (two thirds) reported that they were in paid work ‘voluntarily’ (i.e. because they ‘enjoy it’ or to ‘keep active and fit’); the other third, however, reported financial issues as their main reason to work. The reason to be in work was associated with the well-being of the respondents. In particular, those working because they ‘wanted to’ had the highest quality of life, and they also experience marginal improvements in their well-being when they eventually retire. These results remained valid even when social background and previous health were taken into account. This is most likely because they have control over both the initial decision to continue to work past SPa and the following decision to retire. On the other hand, people working out of financial necessity had lower quality of life compared to respondents who had retired at the usual Spa, and their well-being does not improve when they retire.
What is clear is that the decision to continue working past state pension age strongly affects the quality of life of people. Overall, our study shows that extending our working lives may be good for our well-being only among those who are in the position to voluntarily decide to keep working for positive reasons. Some social groups who have financial difficulties might be disproportionately disadvantaged by longer working lives.
To support policies aimed at extending working lives, it will be essential for governments to focus on policies which can help workers maintain control over the decision to work longer, including mechanisms to support individuals across the life course to ensure a minimum financial well-being in later life in order to mitigate the potential negative implications of ‘having’ to work longer.
The decision to work after State Pension Age and how it affects Quality of Life: Evidence from a 6-year English panel study is a research paper by Giorgio Di Gessa of King’s College London; Laurie Corna of King’s College London; Debora Price of the University of Manchester, and Karen Glaser of King’s College London. It is published in the journal ‘Age & Ageing’.