Change in State Pension age

Researchers from Newcastle University Business School, the University of Kent and University of Edinburgh, in a wider study of extending working lives, found that the alignment of state pension ages for women and men has created very real difficulties for those whose who will now not receive their State Pension when they had originally expected to.

Contrary to some views that abolition of mandatory retirement ages and changes in pension provisions are giving workers more freedom to manage retirement flexibly, the research team found that many people are not able to stop working, even when in ill-health, due to State Pension age changes.

Many of those interviewed were also worried by the precariousness of their jobs and the risk of restructuring and being paid less as a result or redundancy, as they are reliant on this income to provide for them now the state pension age has been raised.

They also felt that at their age they would be unlikely to find new forms of employment, making their current job their only viable source of income.

For workers in the hospitality sector, there was also the issue of how physically demanding the work is, often causing ill health. This makes the prospect of working for several more years before receiving a pension unrealistic, despite no other options being available to them.

Dr David Lain, Senior Lecturer in Employment Studies, Newcastle University, said: “Many older people feel in a precarious situation – caught between having to work longer for financial reasons and worrying that their jobs are unsustainable. This needs to be given much greater consideration by Government and employers.”

Precarious financial situations

The research, which has been published in the journal Ageing and Society, involved interviews with 59 employees aged 50 and over from a local government organisation (37 workers interviewed) and a hospitality organisation (22 interviewed). The sample group comprised both men and women in blue-collar, white-collar and managerial positions.

One interviewee said: ‘I can’t see me physically and mentally being able to do this job, you know, at those ages they’re talking about. I think it’s 66 for me … I mean, that’s ridiculous. I really cannot see me being able to cope with all the workloads, not in this job.’

Many women interviewed were in poor financial situations because they had got divorced and failed to secure much financial support from this process. Prior to this, they had expected to rely, in part, on their husband’s pension. However, after the divorce they had to go back to work with no option of early retirement.

Many of these women are also living in rented accommodation now or paying a mortgage and so have no buffer in the form of equity in a home or the ability to downsize and increase their incomes.

Conversely, though, both women and men who were married and/or owned a house outright or were close to paying off their mortgage were able to use this as a buffer against a precarious job or the rising state pension age, giving them some degree of freedom over their retirement options.

The researchers argue that the risk of State Pension ages rising further still, perhaps to as high as 70, is unrealistic and will cause even more hardships for large numbers of the population and will have a detrimental effect in many ways on UK society. State-provided financial support mechanisms are required to enable people to exercise greater control over the timing of the end of their working lives this means allowing people who cannot carry on working to take a State Pension at age 65.

Reference: 'Understanding older worker precarity: the intersecting domains of jobs, households and the welfare state'  Dr David Lain, Newcastle University Business School, Professor Wendy Loretto, University of Edinburgh Business School and Dr Laura Airey, University of Edinburgh Business School

Ageing & Society

DOI: 10.1017/S0144686X18001253

Press release adapted with thanks to the University of Kent.