Women at work
Women are continuing to work until an average age of 64, reveals a report in the Guardian newspaper on the 11th of October 2018.
This marks a significant reversal in the steady trend seen during the 1980s and 1990s of women opting for much earlier retirement. In fact, the average age of women now giving up work entirely has risen by more than three years since 1998.
Men are working for longer, too, but the average retirement age in their case has risen by only two years (taking them just past their 65th birthday) during the same period.
In the 18 years since 2000, the number of women now working beyond the former State Pension retirement age of 65 has nearly tripled. Taking into account the number of men also working beyond that age, the working population over the age of 65 has doubled during the same period and now represents 10.4% of the working population.
What might be some of the reasons for this reversal in the age at which women opt to retire and what are the possible implications for the way they choose to spend their years in retirement.
An ageing population
In many ways, of course, the trend might be only expected, given the fact that we are all living longer – it is a trend that has been evident over many decades in figures published by the Office for National Statistics (ONS).
In 1980, for example, the life expectancy for women was 76.6 years and for men 70.6. By 1990 the figures had risen by nearly two years to 78.5 for women and 72.9 for men. The turn of the century saw a further significant increase to 80.2 years for women and 75.4 for men. Ten years later, in 2010, the respective figures again showed a marked increase to 82.4 for women and 78.4 for men. Although the upward trend is now beginning to tail off, the (latest) official figures for 2016 show that the average woman can expect to live until the age of nearly 83 (82.9) and the average man until the age of 79.2.
The State Pension Age
In response to the changing age profile of the population, successive governments have introduced increases in the age at which individuals qualify to receive a State Pension.
After many years of women qualifying for a State Pension at the age of 60 and men at age 65, the Pensions Act 2011 raised that age to 65 years for both women and for men.
Beginning in March 2019, that qualifying age rises to age 66 for both men and women. Between 2026 and 2028, the qualifying age will rise once again to 67 for both sexes. Plans to increase that to age 68 by the year 2044 were brought forward by a full seven years to 2037, following an announcement by the government in July of 2017.
The need to work or a choice to work?
Some have argued – as in the Guardian’s story of the 11th of October 2018 – that the principal reason for the rise in the number of women working until later in life is force of economic necessity.
Recent decisions by the government to increase the State Pension age for women from age 60 to 66 in a relatively short space of time has left some of them “destitute” – since many of the nearly 4 million women affected did not realise how the changes would affect them until they had already reached the age of 60, and by then, of course, it was too late to do much about it but continue to work.
But many women are just as likely to continue working as a matter of choice – because it gives them a more rewarding, positive and socially connected lifestyle. So much so, that increasing numbers continue to work until well into their 70s, argued a report in the Telegraph newspaper on the 5th of September 2018.
Financial and retirement planning
In truth, therefore, the decision about how long you continue to work is likely to be about a whole combination of factors – some financial and some lifestyle choices.
Essentially, it is a question of striking the work-life balance that is right for you – and that lies at the heart of our mission here at Independent Pension Specialists to making a difference by changing people’s lives.
Being able to strike that balance, of course, is about keeping your options open. And to keep your options open, you must recognise the need for early planning – so that you are not caught off guard by changes to the State Pension Age, for example.
Early planning also enables you to make sure that you are in a position to make the very most of your pension pot whenever you choose to retire. What constitutes a “sufficient” income in retirement, for example, is going to vary from one person to another.
Age UK’s online pension calculator might help to kick-off your thoughts about how much you might need to live on when you retire and help you towards a plan to realise your dreams and aspirations.
The data cited in this piece is correct as at the time of writing.