What retirement? Rise in over-65s still working

Put that dream of a Tuscany retirement on hold. Pensioners are far more likely to be stacking shelves in Tesco than sunning themselves abroad, according to new figures which show that the number of over-65s still in work has doubled in the past decade.

Pensioners hit by falling annuity rates, stagnant property values and pension funds battered during the financial crisis are being forced to defer their retirement and work for a few extra years to boost their incomes.

The number of over-65s in work has soared from 412,000 in 2001 to 870,000 at the end of last year, figures from the Office for National Statistics (ONS) revealed.

The increase was for full and part-time work which both doubled for the older age group. Full-time employment rates fell for 16 to 64-year-olds over the past two years but rose by 0.5 per cent for those aged over 65.

The increased percentage of older workers in the UK workforce, which doubled from 1.5 per cent in 2001 to 3 per cent in 2010, is set to become a permanent feature with the state pension age for both men and women rising to 66 by 2020. From October, the default retirement age of 65 will no longer apply.

While the increase in older workers was hailed as a victory against age discrimination, unions warned that older employees could suffer serious injuries if they are placed in an unsuitable workplace.

Around two-thirds of those in work after 65 have been with their employer for more than 10 years, the ONS found, and their continued presence could threaten job opportunities and wage levels for their grandchildren.

Andrew Harrup, head of policy at the charity Age UK, said: "These figures show the injustice of the default retirement age. There are a huge number of people who want to work beyond 65.

"Some are working longer because they don't have enough money to cover their retirement and they are under pressure to keep on saving. But others just get huge satisfaction from what they can contribute by working."

Tesco said it welcomed older workers who chose to stay on the shop floor. A spokesman for the retailer said: "We have never operated a default retirement age. Our oldest apprentice is aged 64. As long as our staff have the skills to serve our customers age isn't an issue. Older workers bring experience which helps the younger staff."

But Dave Prentis, general secretary, of Unison, warned: "Older people will be forced to carry out physically demanding jobs which will result in stress and could be potentially dangerous. These figures will only continue to rise as people live longer and are unable to cope with rising economic pressures."

A record 658,000 men and women will turn 65 this year, the largest number since records began, according to the Department for Work and Pensions. The retirement of the "baby boom" generation will add an extra £2bn to the nation's pension bill.

With many over-65s now intending to remain in work, employers who wish to "shake up" their staff fear a rise in redundancy payments. However, the lack of national insurance payments for workers of state pension age is a cost-saving incentive.

Returning to the workplace may not be an option for older pensioners and the very poorest, who cannot afford to work.

Case Study: Jean Rumbold, 68 'I'm not old and they're still getting the tax'

"I got kicked out of my job at a GP's surgery when I was 65 even though I had just got a citation for Receptionist of the Year from the Royal College of General Practitioners. But I wasn't ready to stop working.

"I now work 25 hours a week running the office of an NHS mental health residential centre. In the afternoons I have a paid job teaching a swimming course.

"I'm not old. My husband and I have a motor home and we love to go round Europe and go to London for shows. I couldn't do it if I wasn't working.

"If people want to retire that's up to them, but there are lots of older people like me who need to carry on working to support their pensions. I hope to go on into my 70s. They're still getting their tax.

"I sympathise with young people looking for work but the jobs are there if they want to pull their fingers out."