Flexibility in retirement is welcome, but not if it is driven by poverty

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The Independent Online

It is potentially one of the biggest changes in the social map of Britain for decades. According to the Office for National Statistics, there are now more than one million people of state pensionable age in paid employment and the over-60s constitute the only age group in the country whose rate of employment is rising.

It is potentially one of the biggest changes in the social map of Britain for decades. According to the Office for National Statistics, there are now more than one million people of state pensionable age in paid employment and the over-60s constitute the only age group in the country whose rate of employment is rising.

At first glance, this is exciting news. Qualifying for the state pension, it seems, no longer disqualifies people from working. People are not only living longer, but are healthy enough to work beyond the age designated by the state for retirement. Here is the proof that the onset of "old age" comes later than it used to. All those doom-laden forecasts that longer life expectancy will automatically entail longer dependence on the state and higher health costs may yet be proved wrong. Older people are working their passage.

Often they are doing more than that. Remaining in the workforce for longer is allowing hundreds of thousands of people to enhance their standard of living. Some are simply staying in their jobs past retirement age. Others, more enterprisingly, are seizing new opportunities to switch to something they had always wanted to do. Others are cheerfully downshifting. If this were the whole truth, it would be unalloyed good news - a tribute to the flexibility and diversity of the British economy that has fostered a wide variety of new occupations and ways of working.

We cannot fully embrace this huge social change, however, without knowing much more about the people who continue to work and why they are choosing to do so. If it is because they enjoy their work and want to enhance an already acceptable standard of living, this is one thing. It is quite another if people are working into their late 60s or 70s, perhaps despite indifferent health, because this the only way they can make ends meet.

There may be many reasons for this. It could be because so much of their income is spent on housing, because their endowment has failed to pay off the mortgage, because their private pension scheme has yielded only disappointing returns, or because they took time out to care for children or an elderly relative and this has affected their state pension entitlement. But if people are having to work, rather than wanting to work, then the shift towards an older workforce is less a tribute to our vibrant economy than a sad reflection of the meagre protection it affords to those ordinary workers who have looked forward to their retirement.

Given the longer life expectancy of women than men and lengthening life expectancy generally, there is no reason to challenge the premise of equal retirement ages for men and women. There is no reason either to discourage the trend towards greater flexibility in retirement ages and arrangements. These developments must, however, be accompanied by real guarantees for those whose jobs have required hard physical labour or whose health does not permit them to work beyond the age when they qualify for the state pension.

The Government must also resist the temptation to base its future pension calculations on the assumption that most people will work beyond retirement age, a move that could have the effect of penalising those who choose not to. For those who want to work longer, the legislation banning age discrimination - to come into force in two years' time - is overdue.

But attitudes also need to change. While there are signs that the pervasive quest for youth in the workplace may be starting to change, older workers should not be left to feel that they have been written off once they are past 50. One disturbing aspect of recent studies is that employed pensioners are generally paid less and in lower status jobs than younger colleagues. There is a place for experience, just as there is a place for youth and change, and both have their value. The ONS figures show that the pattern of employment is shifting. We must make sure that it shifts in a way that does not produce a new class of elderly working poor.

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