Simon Read: If you want a choice about when you retire, you must do something positive about it now

 

Around 1.4m people are now working beyond the state retirement age, we learned from official government figures this week. The number of people working beyond the current retirement age has doubled in the past 20 years.

But is this good news or bad news? That obviously depends on whether people are being forced to work longer because they can't afford to retire, or whether they are choosing to work longer. That could be because they are either enjoying what they do, or welcome the chance to earn more money rather than start spending it.

Looking closely at the figures from the Office for National Statistics (ONS) reveals some clues.

What is most striking is an unpleasant gender divide among older workers. For starters, three-fifths of today's older workers are women, but two-thirds of them — the majority – work in low-skilled jobs, such as cleaning.

Meanwhile, two-thirds of the men who are still working beyond 65 are in higher-skilled jobs such as property managing or as marketing and sales directors, production managers and chief executives.

That paints a picture of the bulk of older women workers being forced to carry on the drudgery, while the majority of older male workers appear to be enjoying highly-paid, satisfying jobs.

Of course it's not as simple as that, but there does seem to be a clear gender divide that continues long into retirement.

Another stat issued by the ONS showed that older workers are twice as likely to be working part-time than in full-time posts. That seems to confirm the gender divide. With most cleaning jobs being part-time, for instance, many women may simply have continued with the same hours they had before reaching retirement age. Men in senior positions, meanwhile, are likely to have been allowed to cut the hours they work or even choose to do whatever hours suit themselves.

The lesson to be learned for those of us who are yet to hit retirement age is to do what we can to fall into the camp of having choices when we retire.

Personally, I have no fear of working into my seventies or beyond, but I have a sedentary job that mainly requires me to think and type and one that I can nowadays do from anywhere with a laptop and phone.

Also, the business of journalism – however it ends up in the future – lends itself to the notion of flexible working. There are plenty of former Fleet Street hacks, for instance, who – while ostensibly retired – continue writing for newspapers and magazines or online.

But most workers won't have such a luxury.

Although taxi driving appears to be another occupation that lends itself to working longer, according to Malcolm McLean, consultant at Barnett Waddingham, many cabbies don't have a choice.

"I was told recently in a cab by a driver in his late seventies that he had no pension and intended to work on as long as he was able," Mr McLean recalled.

"He said there was no good in him starting a pension at his age – what was the point as he 'could drop dead at any minute'!"

Those who won't be able to work beyond pensionable age very easily, Have to make some decisions now. If you're in that position, you really need to take time to give some serious thought about what to do about the probably eventuality that you won't be able to afford to retire when you choose to.

Bear in mind, by the way, that the state pension is set to rise to age 67 by 2026, followed by increases every five years after that. So someone aged between 25 and 29 now should not expect to receive their state pension until they reach 73 – or even older depending on future government policy.

The solution is to start saving for retirement now. While many people will simply shake their heads and wonder where they're expected to get the money from to save for what may be decades away, if you can squeeze a few pounds to put into a pension, you'll certainly feel the benefit later.

Under the current pension rules, it's a great way to save. There is a tax incentive which effectively means that if you stash £100 into a pension, the Government tops it up to £125. If you're a higher-rate taxpayer, the incentive is even more attractive, with the Government effectively handing you £40 for every £100 you put into your pension pot.

If you have a workplace pension you can get into, it's extremely likely that your employer will contribute too, with many of the better schemes offering to match your contributions. In other words, every £100 you put in could immediately be worth £225 – or £240 if you're a higher-rate taxpayer.

If you haven't already got pension plans in place then the sooner you start, the better off you'll be – whether you're male or female.

s.read@independent.co.uk

Independent Partners: 10 top tips for retirement. Get your free guide here

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