1 in 3 of us plan to work beyond the state pension age. Is this a good thing?

At a time when the state pension age continues to rise, we wanted to know how long people were planning to work for and why. To find out, we commissioned a YouGov survey of over 2,000 people, looking into people's attitudes towards working in later life and made for some interesting reading.

One in three (34%) of those we asked said that they intended to work either full-time or part-time beyond their state pension age. And half (51%) of those who said they planned to work beyond their state pension age said it was because they wanted to – for example for physical and mental health reasons, to keep busy, to meet new people, or learn new skills. But a worrying 40% of respondents said they planned to continue working because they didn’t think they could afford not to.

When we dived deeper into the research, some interesting differences emerged:

• Part-time vs full-time - Of those who planned to continue working beyond their state pension age, 70% were planning to do so in a part-time capacity. This is consistent with our analysis of recent ONS labour market data showing that, of all workers in their 70s, most (72%) were working part-time.
     
• Gender differences - Men were much more likely to say they planned to continue working into retirement than women – 38% of men compared to 30% of women. Their reasons were also starkly different, with over half of men (57%) and 44% of women saying they wanted to, compared to 35% of men and 45% of women who couldn’t afford to retire.
   
• Differences by age group - There were also differences between age groups, with 32% of those aged 45 and over planning to continue working beyond the state pension age, compared with 37% of those aged between 18 and 34. The younger cohort were also slightly more optimistic about their reasons for continuing to work, with 55% saying they planned to do so out of choice vs only 34% worrying they could not afford not to.

The idea of a sudden transition from working five days a week, to not working at all, is increasingly being shunned. Many of us will have heard stories from friends and family who have gone ‘cold turkey’ and retired overnight, only to realise it wasn’t all that they were hoping for. Retirement is a huge life transition, and can be a very unsettling period for many. There is also increasing evidence to indicate that a gradual glide into retirement can make for a softer landing.

Given the right opportunity, the health benefits of staying active in later years through work and/or volunteering are well documented – from helping to tackle social challenges such as loneliness, poverty and isolation, through to supporting people living with conditions such as dementia. This may be why over one in four (27%) of those surveyed said they planned to work for free in a volunteering role after reaching state pension age.

Sadly, as our research shows, people are not always working out of choice and it’s anything but positive if those planning to work beyond state pension age out of necessity, are doing so in roles that are counterproductive to both their own health and longevity.

We have a wide gulf in life expectancy between rich and poor, and this may be a key driver of the difference in survey responses we saw. In a recent release, the ONS found that the gap in life expectancy at birth between the most, and least deprived areas of England was 9.4 years for males and 7.4 years for females – which is staggering enough. But they also found that the gap in ‘healthy life expectancy’ was 19.1 years and 18.8 years respectively. When healthy life expectancy was adjusted from birth, to those who have already reached the age of 65, they found that on average, men who are resident in the most affluent areas of England could expect 13.3 years of further good health from 65, but for residents in the most deprived areas, this drops to only 5.8 years. 

This stark health inequality in later life may explain why the prospect of working into retirement is not a pleasurable idea for someone with only 5.8 years of healthy life ahead of them. But for those lucky enough to be expecting many more years of good health, the idea of a phased retirement whilst continuing to work part-time can be quite an attractive proposition.