Telegraph Comment Piece – Longer Working Lives – The Bonus Years

by Dr. Ros Altmann

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It is about time we recognized that working longer has tremendous advantages. We should not encourage people to retire at any particular age – if they are healthy and want to work, they should.

If older workers are forced to stop, what will they live on? The state pension is totally inadequate and most people have very little private pension income – especially as employers have been closing their pension schemes and private pensions have been hit by falling stock markets and annuity rates.

The financial reality is that pensions alone cannot solve the pensions crisis. For most people, saving a lot more is not a realistic option. The amount they would need to save to provide a ‘decent’ pension is too high.

Part of the solution has to lie in people continuing to work as they get older. If older people are fit and healthy, they usually want to keep working – but not full time. A phase of life of part-time work, in your 60’s and even into your 70’s – can offer a much better lifestyle than spending decades doing nothing with very little money to live on. If pensions supplement part time work, they become much more affordable.

At the moment, policy works against this. There should not be any one ‘magic’ age beyond which society says people are too old to work. Each individual is different and, if you don’t have much pension, you should be able to keep working to have a better lifestyle. At the moment, employers can sack an older worker just for being old. This is ludicrous – and what a waste of resources!

Government should take the lead and encourage employers to help older workers find employment or stay working on a less than full time basis if they want to. Just like we have done for mothers with young children – more flexibility and choice that allows the economy to benefit from increased labour force participation by older workers, who would otherwise be living on very little money.

There is a whole new phase of life – call them ‘bonus years’ – waiting to be grasped. Some years of part time work, where people gradually cut down instead of stopping work altogether.

Previous generations could not have envisaged this, but with all the advances in health, longevity and working practices, it is now realistic. Each person should have the opportunity to stay working if they want to – a different approach to lifetime planning. Retirement should be a process, not an event, in which people keep earning some money but also have more leisure, and more money to spend in their free time.