Employees show support for extending working lives

Findings from a survey by the Chartered Institute of Personnel and Development, released in October 2010, suggest that over two fifths of workers are planning to continue working beyond the state pension age, on either a full-time or part-time basis. A similar proportion disagrees with current legislation enabling employers to retire employees once they reach the age of 65. This finding is welcome news for the government, which plans to abolish this working limit.

About the survey

On 29 October 2010, the Chartered Institute of Personnel and Development (CIPD), the professional body for human resources managers, published results (522Kb PDF) from its summer 2010 quarterly online Employee Outlook survey.

The survey of 2,096 UK employees was conducted for the CIPD by YouGov in June 2010. The sample was selected and weighted to be representative of the UK workforce in relation to sector and size (private, public, voluntary), industry type and full-time/part-time working by gender. Panellists who matched the sample profile were selected at random from the YouGov panel and sent an email inviting them to take part in the survey.

Key findings

According to the CIPD survey, 42% of workers plan to work beyond the state pension age, while 29% do not. A further 25% said they ‘didn’t know’. Some 17% planned to continue working full time, while 22% favoured working part time, either with the same employer, a different one or working for themselves or their own company in each case. The largest group of respondents (45%) expected to retire while aged between 66 and 70 years. Within these overall figures:

• slightly more women (41%) than men (39%) planned to continue working, but men (19%) were more likely than women (14%) to plan to continue in full-time work;
• older workers were more likely to plan to work beyond the state pension age, with 54% of respondents aged 55 and above planning to do so compared with 29% of those aged between 18 and 24;
• public sector workers (37%) were the least likely to say they planned to work beyond the state pension age, compared with 42% of those in the private sector and 47% of voluntary sector employees.

Voluntary sector employees were the most likely to plan to continue working for their current employer, either full time (15%) or part time (15%). Just over one in 10 (11%) public sector employees expected to continue working full time for their current employer while 13% expected to do so part time. Private sector employees were the least likely to plan to continue working full time (9%) or part time (10%) for the same employer.

A worker’s financial position was the most commonly cited reason for working beyond the state retirement age (72% of respondents), followed by a desire to continue using their skills and experience (47%), social interaction (41%) and self-esteem (34%).

More money was also the main factor that would encourage respondents to work longer (43%), followed by flexible working arrangements (28%) and more varied, interesting work (21%).

As regards the default retirement age of 65, 44% of respondents said that they disagreed with current legislation, compared to 25% who agreed with it, with little difference in attitudes by gender. Some 60% of respondents were aware that they can make a formal request under current legislation to continue working beyond 65, compared with 40% who were not.

Respondents were also asked on what basis, aside from age, employers should make decisions about the continued employment of older workers. Some 64% cited health, while 62% said personal performance.

Older workers were significantly more likely to disagree with the default retirement age than younger workers, with 56% of those aged 55 and above disagreeing with the legislation, compared to 35% of those aged 18–24.

Policy context

In July 2010, the government published proposals (UK1008019I) for abolishing the default retirement age that, under the Employment Equality (Age) Regulations 2006 (UK0603029I), enables employers to impose compulsory retirement on workers once they reach the age of 65. This change will be phased in between April and October 2011.

In its October 2010 spending review, the coalition government announced proposals to increase the state pension age – for both men and women – to 66 from 2020. The change will affect about 5.1 million people. The government is also considering the timetable for future increases to age 68. Women’s state pension age, currently 60, will be increased to 65 – the current male pension age – by 2018, more quickly than previously planned.

Commentary

According to the CIPD’s diversity adviser, Dianah Worman, the outcome of the survey provides something of an endorsement of the UK government’s plans to phase out the default retirement age (DRA). She said:

The survey results show support from UK workers for the action the government is taking to phase out the DRA. Its removal will put employers in a strong position to access a wider pool of mature talent. It will build on the beneficial experiences of UK employers who have already abandoned compulsory retirement ages. There are clear business benefits to employing a workforce that is age diverse and reflects organisations’ customer profiles.

The prospective abolition of the DRA has also been welcomed by anti-ageism campaign groups and, more cautiously, by trade unions. However, employer organisations have expressed concern about the practical implications of the move, particularly in terms of the legal issues involved in the dismissal of older workers.

Mark Hall, IRRU, University of Warwick