Future of an Ageing Population
gs-16-10-future-of-an-ageing-population
gs-16-10-future-of-an-ageing-population
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2.1 Longer working lives<br />
Working later in life has benefits for individuals, employers <strong>an</strong>d the state.<br />
Although on average people are first entering the labour force at older ages,<br />
working lives in the UK are getting longer. This is driven by late-life labour<br />
market participation rates which have been increasing over the last 15 years 18 .<br />
Men <strong>an</strong>d people with more education <strong>an</strong>d higher status occupations are more<br />
likely to work in later life 19 .<br />
Retirement ages in the UK are expected to continue increasing, driven by<br />
increases in the SPA, the abolition <strong>of</strong> m<strong>an</strong>datory retirement, <strong>an</strong>d older people’s<br />
expectations. Expectations could ch<strong>an</strong>ge in part because <strong>of</strong> fin<strong>an</strong>cial necessity:<br />
as people live longer they will need to save more to have the same st<strong>an</strong>dard <strong>of</strong><br />
living in retirement as current generations 20 . This will be increasingly import<strong>an</strong>t<br />
as life expect<strong>an</strong>cy continues to increase, <strong>an</strong>d will be a particular issue for<br />
women, because <strong>of</strong> their higher life expect<strong>an</strong>cy 19 .<br />
There are non-fin<strong>an</strong>cial benefits to working longer. Evidence shows that it gives<br />
people increased resilience in later life 21 <strong>an</strong>d those in employment perform best<br />
on almost every measure <strong>of</strong> cognitive function (although it is unclear whether<br />
work is the cause or the effect) 22 . Studies have found that working c<strong>an</strong> have<br />
health benefits, particularly for people with mental health issues 23 .<br />
Retaining older workers is likely to be increasingly import<strong>an</strong>t for employers.<br />
Staff who have been in roles for long periods <strong>of</strong> time develop industry-specific<br />
knowledge <strong>an</strong>d networks. These int<strong>an</strong>gible assets are not readily available<br />
from new hires 24 . Beyond this, demographic projections reveal the import<strong>an</strong>ce<br />
<strong>of</strong> retaining older workers for businesses. One study estimates that between<br />
2012 <strong>an</strong>d 2022 12.5 million jobs will be opened up through people leaving the<br />
work force. Over this period 2 million new jobs will be created, yet there will be<br />
only 7 million new workers entering the work force which leaves a signific<strong>an</strong>t<br />
gap 24 . If current workforce exit rates continue for the over-50s – especially the<br />
steep decline in employment after age 53 (see Figure 2.1) – the UK will face a<br />
labour shortage 25 .<br />
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