A silver lining for the UK economy? The intergenerational case for supporting longer working lives
We are living longer and working longer. While an ageing society contributes to pressures on public finances, it also creates new opportunities to rebalance the fiscal equation.
Making work better for us all as we age will support more people to work for longer. This increases tax revenues, reduces benefit spending and boosts overall levels of GDP, consumer demand and employment opportunities for all ages.
The need to work for longer must be viewed in the context of inequalities within generations. Older workers face higher levels of long-term unemployment, long-term low pay, gender pay differentials and health-related inactivity. Too many people are approaching retirement with inadequate savings in poor health and at risk of missing out on a good later life. Policy solutions that focus on younger workers to the exclusion of older workers will fail to address these key structural inequalities in the labour market, leading to further disparities for Generation X and younger workers as they reach middle age. Making work better for older workers will benefit individuals the economy and the state, now and into the future.
Despite the growth in older workers over the last 20 years, there is still a stark gap between employment rates of people in their 50s and early 60s and those in their 40s. Currently, less than half of the population are in employment the year before they are eligible for their state pension. This age employment gap is likely to grow in line with the scheduled rises in state pension age unless action is taken now.
The key driver of supporting people to work for longer is to improve the quality of work. Improving employment practices for older workers will make the workplace better for everyone.