Working After State Pension Age

June 27 2003 - A report published earlier this year by the Department for Work and Pensions provides information on the labour market participation of older people at, and after, the State Pension Age (SPA). The research was conducted by the Policy Studies Institute and the Personal Finance Research Centre at Bristol University.

Main findings

* 8% of women at or above the age of 60, and 9% of men who are 65 or over are still in employment.

* Women who are separated or divorced are more likely to be working than married women.

* Men and women who are owner-occupiers with outstanding mortgages on their properties are most likely to be working. Tenants are among the least likely to work.

* Over all, 40% of non-workers received an occupational pension, compared to 33% of those who were still working. But the link between employment and lower levels of occupational pension receipt was confined to men. 67% of non-working men had an occupational pension in comparison to 53% of working men.

- Having any educational qualifications was associated with working past SPA, and having none was associated with leaving work.

- Important links were found between the participation rates of men and women living in couples: 41% of post-SPA working men had working partners compared with a mere 8% of non-working men. 55% of working women had partners who were also working, while just 11% of non-working women had partners at work.

- Participation rates after SPA were not strongly associated with regional unemployment levels. But the highest levels of post-SPA employment were found in London - particularly inner London - and the South East of England.

Types of jobs

- Three quarters of men and women who were working after SPA were in jobs they had held prior to SPA. This proportion increases for full-time employees but drops to a little over half for men working part-time. Part-time opportunities seemed to be especially important for post-SPA workers, the largest groups of employed and self-employed men and women worked part- time, predominantly through choice

- Employer size was important with workers over SPA who were twice as likely as other age groups to be employed in companies with one to 10 staff and far less likely to be employed in organisations with over 50 staff.

- Reaching State Pension Age was not generally associated with deterioration in hourly pay rates once occupational group, employment status, sex and educational achievement were controlled for. However, there was a gap between pre- and post- SPA wage levels among men working full-time.

Dynamics of retirement

- The best predictor of being in work post-SPA overall is being in work in the period just before. Most factors correlated with working post-SPA worked through this link. Their independent effect on working after 60/65 was much weaker.

- Rates of working were sustained for only a few years after State Pension Age, and this only happens for those working in the period just before SPA.

Effects of working past State Pension Age

- Men working past SPA reported financial situations that were superior to those of non- workers. Some 59% of men working past SPA said they were 'living comfortably', compared with 40% of those not working (and aged 65-75). Among women, 87 per cent of workers over SPA said they were either 'living comfortably' or 'doing all right', compared with 65%t of those women not working. Median incomes of workers were around two-thirds higher than among non-workers for both men and women.

- Around 76% of men working and aged 65-75 described their health over the last years as either 'excellent' or 'very good', compared with 54% of non-workers. Among women, 71% of workers reported a similarly high level of health, compared with 49% of non-workers.

- Half the male workers, and approaching two-thirds of the women, were saving money, compared with around one third of non-working men and women. This could be evidence that they were putting money away for their future retirement, particularly since the proportion of people saving, compared to five years' previously, had fallen for non-workers, but increased for workers.

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