A new report published today by the Centre for the Modern Family examines issues surrounding older workers, whose numbers have increased significantly year-on-year since the government’s abolition of the default retirement age in 2011. According to their ‘Older Workers’ study, in October 2014 there were more than 1.1 million over 65s still in employment in Britain.
Demographic change, i.e. the UK’s ageing population, is one of the most powerful forces shaping our society and in particular our workplaces. We are living longer, healthier lives; with many opting to remain in work once they reach the former default retirement age of 65.
Reasons for choosing to remain in employment are varied. Some feel that they still have much more to give to their particular role or organisation whereas for others their decision may be financially motivated. Wanting to retain the same lifestyle, the cost of caring for elderly relatives or supporting younger family members are often cited as common factors for staying in work. In terms of the individual benefits, the Department for Work and Pensions estimates that an average worker staying in employment for an extra year can ‘boost their pension pot by £4,500, in addition to earning an extra year’s salary’.
So what should we do to respond to this change? I believe that the productive potential for older workers is enormous and something which employers must give greater priority. Investment in training later in life is part of the solution to retaining older workers, who come with a wealth of experience, and closing our ever-widening skills gaps.
Think tanks such as the Centre for the Modern Family are right to highlight this important issue and suggest ways in which we can adapt our workplaces to suit today’s needs. Indeed, finding ways to modernise our ways of working could pay huge dividends in the future. Further support in the run-up period to retirement, mid-life career reviews, skills audits and offering flexibility working where possible may help keep valuable older workers. Earlier this year, Dr Ros Altmann CBE estimated that if half the 1.2 million older workers – who are currently economically inactive but would like to work – re-entered the labour market we could boost GDP up to £25 billion a year. The time to act is now.