Retirement and the pension crisis

Abstract

In many countries, the State Pension Age is rising. Governments often present this as a reflection of increasing life expectancy and the need to extend working lives beyond the traditional retirement age, with individuals choosing, and also being required by law, to work longer. Indeed, in the UK, the government has also stressed that the increase in life expectancy presents them with no alternative other than to increase labour market participation of older workers. As a result of this increase, the role of flexible working practices in providing a route for older workers with the ability to make choices regarding how long they choose to engage in work-related tasks has become important and is being widely discussed. These working practices have often been held up as a way to improve employment choices for older workers, or provide bridge jobs to ease older workers into retirement. Indeed, the Department of Work and Pensions (DWP) have also identified this type of work as providing older workers with a choice where they may opt for a phased approach to retirement. This has led to the suggestion that retirement is no longer seen as a life-defining event where workers leave the labour market for the final time but, instead, as a reversible state. Moreover, research has demonstrated that ‘financial security’ is key in retirement planning, suggesting that whilst it may be a choice to work past retirement, it may represent compulsion for those who have worked in low-pay occupations where pension coverage is poor. This may well be the case-whilst we have seen increases in employment rates amongst the over-50s and over-60s, it is worth noting that this increase has been in full-time work, not part-time work. This suggests that people are simply staying in the labour market longer, rather than bridging their way into retirement or ‘un-retiring’ via the use of flexible working practices. Thus, we have a growing life expectancy that has encouraged government to pursue a policy of increasing labour market participation of older workers alongside decreasing access to occupational pension provision. Despite the importance placed on the role of flexibility by government and policy makers, research has revealed that, when interviewed, older workers expressed the desire to reject flexible work, much of which is characterised by low pay/skill and few prospects. Loretto and Vickerstaff have also demonstrated that amongst older and retired workers there is actually a feeling of ‘release’ that accompanies retirement, suggesting that individuals on the whole wish to be free from the labour market, and ‘get off the treadmill’ once they have ‘done their bit’. This research challenges the agenda of extending working lives, suggesting that many people are looking forward to ending paid employment where such a choice is possible.