People who live in deprived areas are more likely to work past state pension age because they cannot afford to retire without the state pension, according to a report by the Institute for Fiscal Studies.
The research suggests that the increase in the state pension age to 66 means that people in poorer areas are more likely to stay in work longer than those in more prosperous areas, due to their reliance on the state pension.
The data shows that the employment rate of 65-year-old men has increased by 7.4 percentage points, while the employment rate of 65-year-old women has increased by 8.5 percentage points.
It also found that women living in England’s most deprived fifth of local areas saw their employment rate rise by 13 percentage points, compared to a 4 percentage point increase in the least deprived fifth. The findings suggest that those who are less privileged are more likely to work longer.
According to the research, those who postpone retirement as a result of the reform may be doing so because they believe they must continue to work in order to maintain their standard of living.
Many, according to the data, retire before the age of 65, either because they find it difficult to work or because they have enough retirement savings to cover a year’s state pension income.
But the majority of 65-year-old men and women are in fact out of the labour market and the reform, in particular, has resulted in an additional 5,000 unemployed 65-year-olds.
Interactive Investor head of pensions and savings Becky O’Connor says: “Many people work for longer because they have to, not because they want to. If someone is healthy, well, and enjoys work, there are many benefits to continuing to do so, even if they have enough money to retire.
“But we do need to stop sugar-coating working into old age, take off the rose-tinted glasses, and confront the reality that the reason many continue to work is that they do not have sufficient, or maybe even any, private pension provision.
“Old ladies are presumably not filling up supermarket shelves because it gives them a sense of identity or keeps their mind challenged. I am sure many could think of other things they would prefer to be doing, but the truth is, they don’t have a choice.”
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