By Baroness Greengross,
For many years I have been heavily engaged in the lifetime learning debate, but the impact of longevity and technology on employment, particularly of older people, means that we must make a renewed effort to shine some light on this neglected issue.
Increasing longevity is a global phenomenon that, rather than being feared, in terms of a ‘time-bomb’, needs to be welcomed. Improvements in public health and nutrition and medical advances are the main causes of people living longer and, according to the UK Office of National Statistics (ONS) and the Equality and Human Rights Commission, over the last 200 years life expectancy in Britain has increased continuously.
In the UK, the number of people over 100 has risen by 65% in the last decade and one in four babies born today can expect to live to 100. By 2039, one in 12 people will be aged 80 or over and over 25% of UK Population will be over 65. But only half of those retirement years will be spent in good or very good health, placing a huge burden on the NHS as we know and also on pensions. Health outcomes also vary depending on where you live. Differences in education, employment opportunities, lifestyle behaviours, social mobility and the wider local environment all have a major impact on health.
Another impact of increasing longevity is that people now spend 7 years longer in retirement than in the 1970s. This means that many older people, even if they had planned for it – and many don’t, will not have accumulated sufficient assets and savings to last them through this extended post-work period and could be at risk of experiencing financial difficulties. Many rely on the state pension which, as more older people live for longer, is costing the state more than it can afford. So while increased longevity is a cause for celebration, it also poses big challenges.
For every 1000 workers there are 305 pensioners and by 2050 that will rise to 350 pensioners. We must not forget that taxes paid by working age people also have to fund the healthcare and education of the booming numbers of children under 16. Thus either the total pensions spend will have to fall or retirement age will have to rise or both and unsurprisingly the State Pension Age (SPA) is already rising. Currently, the SPA is set to be 67 for both men and women by 2028 ad this will rise to 68 by 2046. Company pension schemes are experiencing similar funding difficulties and many older people will require extensive generic and bespoke advice and support if they are to manage.
Most commentators agree that extending State Pension Age will not be enough on its own and both Government and business will have to strive together to help people work longer into old age. This issue will remain of high importance and the Prime Minister underlined that she understood this by her appointment of Matthew Taylor, chief executive of the Royal Society of Arts, to head up an independent review to look at whether employment regulation and practices are keeping pace with the changing world of work and also to examine whether there are ways to increase opportunities for older workers.
And there has never been a more urgent need to benefit from the contribution older workers deliver and so, as part of a multi-generational workforce, we urgently need to recruit, retain and retrain and re-skill older workers.
Upon retirement, while some older people find they have a significant gap between the income and savings they have and what they need to maintain the lifestyle they expected, many remain active consumers of goods and services. And while the older customer may have been with a particular brand for years, that does not mean they are necessarily complacent. They expect quality and are not afraid to switch or look for better value.
They tend to be discerning, have seen what good service and quality look like and they have got the time to compare and seek out better deals – and the penetration of on-line shopping can only accelerate these trends. The way brands present retirement, and the stereotypical view of it adopted by most advertising imagery they use, needs to reflect this new marketplace as do terms and conditions around features such as discriminatory and arbitrary upper age limits – for example on things such as travel insurance and car hire. Support is available to help both business and individuals with these seismic changes, for example Newcastle University’s Changing Age for Business Programme has an ActiveAge element which seeks to publicise the opportunities for businesses to develop products and services for the older population, who in 2012 were responsible for 40% of the consumer demand in the UK spending £200 billion per year.
In terms of working longer, in 2014, the International Longevity Centre (ILC) -UK, of which I am the Chief Executive, calculated that if the skills and abilities of 50-64 year olds were fully utilised and the employment rate matched that of those in their 30s and 40s, UK GDP could have been £88.4 billion higher that year, equivalent to an uplift of 5.6%. And more people would like to remain in the workforce for longer, for although 1.1 million people are currently working beyond state pension age, and while some are obliged to purely for financial reasons, many choose to remain at work. As well as providing wellbeing and personal value in terms of social contribution, working longer provides crucial additional tax revenues to the wider community.
However 1 million people 50-64 year olds have been forced out of work before state pension age, through a combination of redundancy, ill health or early retirement. ‘The Missing Million’, a research series undertaken by the ILC-UK with Business in the Community (BITC) and PRIME, published in 2015 found that the proportion of men between 50 and 64 who are not working has doubled and the economic cost of this is high. The drop in work rates among the over 50’s since the 1980’s has cost the economy around £16 billion a year in lost GDP and costs the public purse between £3-5 billion in extra benefits and lost taxes. Because of growth in the older population, with present employment rates, a million more over-50’s would not be working by 2020. Businesses are missing out on a storehouse of skilled and experienced workers because they rule out employing older people. Many people face discrimination when looking for a job when they are past a certain age.
According to the Government’s new Champion for older workers, Andy Briggs, Chief Executive Officer of AVIVA, nearly two in three 55 to 64-year-olds have said they have felt discriminated against by a prospective employer because of their age and this is despite the fact that a recent Chartered Institute of Personnel and Development report, entitled Attitudes to Employability and Talent, found older workers are perceived as the most talented and employable of all under-represented groups in the workforce and have the most positive attitude to work.
The rest of this editorial can be seen in the July – December 2019 issue of I-MAGAZINE.