The Pensions and Lifetime Savings Association (PLSA) has described as “alarming” new research from the Centre for Ageing Better on the ‘unemployment trap’ experienced by those aged over 50.
The Centre for Ageing Better report found health and caring responsibilities, suitability of work, employability, institutional ageism and national policy were all barriers to employment for those aged over 50.
PLSA director of external affairs Graham Vidler said: “This research makes for alarming reading. With people spending longer in education and living longer, we simply cannot afford to compress working lives like this.
“It will be hard, if not impossible, for them to save for a longer retirement – bearing in mind that those in their 50s now may live well into their 90s.”
The Centre for Ageing Better report cited figures suggesting that, of those people aged 50 to 64 in the UK who report themselves as economically inactive, around one million had left work involuntarily. The most common reasons for involuntary labour market exit were ill-health, caring responsibilities, and redundancy, it said.
Vidler added: “Many people see their 50s and 60s as a time to focus on building up their retirement saving. Being unable to work due to poor health, caring responsibilities or lack of employment opportunities will hit their retirement plans hard.”
The Centre for Ageing Better said a proactive response to its findings was required to develop “a new narrative on ageing” and create a more inclusive economy.
Considering outcomes, rather than output, for employment services, and taking a preventative approach by avoiding older employees falling out of the work in the first place, were other ways to address the issue, it added.
The PLSA has previously conducted its own research, ‘Hitting the Target’, in which it asked for feedback on two questions which fed into concerns raised in the Centre for Ageing Better report.
They were: ‘What principles should underpin employers’ and pension providers’ approach to helping people work for longer?’ And ‘What are the most effective ways pension schemes and providers can help members understand and take advantage of options for drawing their pensions while still working?’
‘No silver bullet’
Analysis by the Department for Work and Pensions has shown 12 million people of working age were heading towards inadequate retirement incomes. It reported around a third of people who stopped work between 50 and the state pension age, between 2008 and 2010, saw their household income drop by more than half.
“There is evidently a particular set of challenges this age group is facing, with significant financial, health and social consequences to this,” the DWP said. “As a result, many people have written themselves off, despite having over a decade until they will be eligible for the state pension.
“In light of the complex nature of these challenges, there is no silver bullet response to this issue – we need to see change happen at multiple levels.”