Today, we are publishing “Fuller Working Lives: A Partnership Approach”, a new employer-led strategy which outlines the demographic change facing the UK and the opportunities and challenges an ageing workforce present for employers, individuals, Government and for wider society.
We are living on average almost a decade longer than our grandparents. While this is good news, it also has implications for employers and the economy, as well as people’s own personal financial security, health and wellbeing.
In 2010, one in four of the working age population was aged 50 and over; and this is projected to increase to one in three by 2022. By 2035, people aged 50 and over will comprise half of the UK adult population (source: ONS (2014) population estimates and 2014-based population projections). Fuller working lives are important for individuals, employers and the economy.
For individuals, analysis shows that by delaying retirement until 65 instead of 55, a male average earner could have £280,000 extra income and might increase his pension pot by 60%. By retiring at 63 instead of 55, a female average earner who took a 10-year career break, could have £180,000 extra income and might increase her pension pot by 50% (source: DWP modelling, “Fuller Working Lives Evidence Base 2017”). Moreover, being in appropriate work is good for an individual’s health, both physical and mental.
For employers, in order to meet future demand it will be increasingly important to recruit, retain and retrain older workers. Over the next five years to 2022, there will be just under 2 million more people aged 50 years and over and 300,000 fewer people aged 16-49 (source: ONS (2014) population estimates and 2014-based population projections). We particularly want to support older workers to remain in and return to the labour market; one in four men and one in three women reaching state pension age have not worked for five years or more.
For the economy, adding just one year to people’s working lives could add 1% to GDP per year; that would be equivalent to £18 billion in 2015, according to ONS data (2015).
Leading employers have worked with us to identify the steps needed to ensure the retention, retraining and recruitment of older workers. The new strategy sets out the case for action business to business, as well as the importance of fuller working lives for individuals and the key actions that Government are taking. It is underpinned by analysis of the attitudes, behaviours and experiences of individuals and employers which are integral to the achievement of the fuller working lives ambition. To support individuals aged 50 years and over to remain in and return to the labour market and tackle the barriers to doing so.
I will place a copy of this strategy document and supporting evidence base 2017 in the Libraries of both Houses.