Working after the age of 65

Work until you drop. That is a familiar tabloid newspaper headline. But it is becoming all too much of a reality for many of the baby boomer generation.

The latest figures from the Office of National Statistics show that record numbers of older people – particularly women – are now working beyond the age of 60.

What drives people to work past retirement age?

Economic factors are forcing many people to delay - if not abandon - dreams of early retirement. Inadequate income following divorce, the death of a partner or the need to help with the costs of caring for an elderly parent can mean going back to work instead of enjoying more leisure time.

But for many, there is a more positive reason for going back to work when most of us head for the garden. They are reluctant to stop work completely at the cliff edge of 60 or 65. They miss the stimulation of the work environment and dread the prospect of empty hours of retirement stretching ahead.

Others choose to return to work for pin money – saving up for something special such as a holiday or new TV.

Find out about the rules that govern working past retirement age.

Women take the lead in working over 60

Official figures show there are now 850,000 women over 60 in employment when they might traditionally have expected to have stopped working. This is the highest figure since records began – and the number of older women workers is growing faster than any other age group.

Over the 12 months to October last year, a further 63,000 women aged 60 or above took a job, accelerating an upward trend that began around 2003, when fewer than 600,000 worked beyond 60.

There are now twice as many women as men over state retirement age in work – though their official retirement age is at present five years earlier than for men. Of the 175,000 jobs created over the past three months, more than half have been filled by people aged over 50.

And the greying trend is set to continue. By 2020, a third of the workforce will be aged over 50 and by 2025 almost half the adult population in the UK will be 50 and over. According to the Department for Work and Pensions, there is no single reason but a range of factors, “both demographic and practical”.

The population in their twenties and thirties is falling – and from 2010 the number of young people reaching working age will begin to fall by 60,000 a year; many people now enter work much later after full-time education stretching into their twenties; and people are living longer, staying healthy and wanting to remain active for longer.

Divorce drives women back to work

For many women, poor pensions mean they have to find jobs. According to Ros Altmann, the independent pensions policy adviser, growing numbers of them are on their own because they are divorced rather than widowed.

“They are on their own at a younger age than they would have been in the past. Typically they can no longer rely as much as in the past on their husbands providing a pension or an income for them when they are beyond 60,” she said.

The state pension was “stacked against women” because family commitments often meant they failed to complete the qualifying years of National Insurance contributions. Altmann added: “We have the lowest state pension of any developed country and women’s pensions in this country are a national disgrace.

“A lot of women may have relied on the married women’s stamp or may have relied on their husbands providing a pension and then find themselves on their own without any income.”

Working past retirement can be a choice

Altmann acknowledged that it was not just economic necessity that leads to older people finding jobs, or working on past their normal retirement date.

“Increasingly, women aren’t feeling old at 60 in the way they used to. The kids have left home. They may want to do part-time work.

“Unless we get people back to work in their sixties and seventies, we are heading for economic decline. There will be a huge rise in the number of people over 65 – there aren’t enough young people there to take their place. Working part time will be part of the solution to the pensions crisis.

“Most people will never be able to save enough to provide for what they think of as a decent pension to last them 30 years – nor is any government going to be able to afford huge amounts of money.”

How much money will you need in retirement?

Low pensions keep people in work

This year marks the centenary of the state retirement pension – but its basic rate is well below the official poverty level. And many people will not even get the basic pension of £87.30.

Official figures show that around 1.8 million men and women with 30 years or less NI contributions are expected to retire over the next two years – missing out on plans to reduce the number of years needed to qualify for a full state pension. This means they will join the four million pensioners – mainly women – who do not receive a full state pension and have to rely on means-tested benefits.

A man with 30 years’ NI contributions retiring before April 2010 will receive just 69% of a full state pension – £60.23 at today’s value. For a woman, it will be just 77% (£67.22 at today’s value).

Are you one of the women disadvantaged by the change in state pension age?

You cannot be forced to retire

New Employment Equality (Age) Regulations which came into force in October 2006 banned unjustified retirement ages of below 65. They also introduced a right for employees to request working beyond retirement age and a duty on employers to consider that request.

Some of the country’s leading employers – ranging from Ikea to Coca-Cola – are changing employment practices and allowing older staff to work into their sixties, and even their seventies.

Barclays now employs more people over the age of 50 than under the age of 21. The number of people over 55 in the organisation has increased by nearly 400 over the past two years.

A total of 61% of employees who reached their normal retirement age of 60 over the past couple of years have continued to work for the bank, while the Nationwide Building Society has extended its employment conditions to enable employees who wish to work till 75 to do so.

Nearly 16% of Tesco employees are over 50 and Asda has gone to great lengths to seek out older employees – even attending tea dances and bingo nights to find potential recruits.

However, the real effort has gone into creating flexible working options that reflect the fact that a large proportion of the company’s older employees do not want a full-time job.

Read our guide to age discrimination in the workplace.

As well as offering unpaid leave for grandparents and carers, Asda also allows employees to take “Benidorm leave”, in which their jobs are kept open for them while they take a few months off to head for sunnier climes in the winter.

Despite all the encouraging words for the over-50s on the websites of leading employers and Government agencies, the Employers Forum on Age admits that ageism is widespread.

Some employers define an “older worker” as “a women over 35” and “a man over 42”. All too often, opportunities for older workers are in shops or supermarkets – an older version of so-called “Mcjobs”, the low-wage jobs offered to unemployed teenagers.

* For more details contact The Age and Employment Network, 020 7843 1590, or www.taen.org.uk; Employers Forum on Age, 0845 456 2495, or www.efa.org.uk