Outlawing age discrimination and introducing policies for
flexible retirement are goals of the UK government.
According to Minister of State for Pensions Malcolm Wicks:
"There are too many men and women in their 50s and early 60s
who would like another job, but because of age discrimination
find it almost impossible to get one. There’s something
ridiculous about being told at 53 or 54 that you are too old
when you have another 30 years of life ahead.
"That kind of ageism can be as debilitating and cruel to the
individual as being told you can’t have a job because you are
black or because you have a disability. This kind of
discrimination is going to be outlawed in 2006.
We are making progress, but too many people are out of work in
that pre-retirement period.
"There is an anchor question here, about the retirement age
at work – not when you can get the state pension. That is
whether we should be much more liberal about when we are
expected to retire. We need to move to a situation where there
is far more flexibility about people making choices about when
they work and when they retire in their 60s or maybe later"
(Speech at Future East conference in late 2004)
Too many people are indeed "out of work in the pre-retirement
period". And the cost to companies and the UK economy is
According to a report The Economic Contribution of Older
People, published by Age Concern, GDP is from £12 billion up
to £30 billion lower than it might be otherwise because of the
under-employment of older people.
An ageing population
The underemployment of older works is happening at a time
when society as a whole is ageing:
- average life expectancy now is 76 for men and 80 for women
- by 2050 this is expected to be over 80 for men and over 85
- by 2021 there will be more people over 80 than there are
children under 5
- In twenty years time there will be two million fewer
adults aged between 16 and 50 and two million more between 50
and state pension age.
It has been said that we are now moving from a 3 -generation
to a 4-generation society. That is, one where it is
becoming normal rather than the exception for 4 generations of
the same family to be alive at the same time. People in
their 60s and 70s are increasingly depended on by elderly
parents, rather than being themselves at the top of the
Couple this with a pensions crisis where many people now
under 60 will not have enough income after retirement, there is
an overwhelming economic need for people to rethink what
retirement means for them.
Is working forever what I want?
The implication of this is that people need to work longer,
and postpone retirement.
At the same time, few people want to work flat out beyond the
current retirement age. In fact, workplace surveys usually
show that older staff are very actively thinking about working
differently - either scaling down their work, working different
hours, or spending one or two days per week working from home.
There has also been an increasing trend, often profiled in
the weekend supplements, to downshifting - stepping out of the
rat race to do what you really want to do, though it means
earning less money. It may mean cashing in on a valuable
property and moving to somewhere where property prices are
cheaper, and leading a more simple - but more fulfilled - life.
In many ways new technologies make this option more possible.
Contacts both with markets and family can be maintained over
What are older workers doing now?
Currently around one third of people between the ages of 50
and state pension age are not working.
Within this age group, one can expect employment rates to be
somewhat lower due to people taking early retirement and due to
acquired disability or long term illness. However, this
does not account for the extent of economic inactivity.
Nor should we make easy assumptions that people who have retired
and people with disabilities do not want to do any work, and
effectively exclude them from the labour market.
Older people are more likely to be doing part-time or
temporary work than any other age group part from the youngest
age group (16-24) of students and school and college leavers.
A clear majority (77% of men and 91% of women) indicate that
they are working part-time out of preference rather than because
they cannot get a full-time job.
So there is demand for part-time working. But in most
forms of employment, it is hard to make the transition to
part-time work from a full-time post.
Older workers are also more likely than other age groups to
be self-employed. This may in part be explained
statistically by the number of employees in this age group who
take early retirement, but it does not explain the whole
What it shows is that many older people are using their
skills and experience to run their own enterprises. But
recent research shows that lenders are usually reluctant to
invest in new ventures started by the over-50s.
What will the new legislation do?
The new Age Discrimination legislation is the UK's response
to a European Directive on Equal Treatment in employment.
The government has made it clear that legislation to ban age
discrimination will take effect from October 2006, although it
is not yet entirely clear how exactly it will work.
However, following an extensive consultation process and a
recent decision about the future retirement age, it seems likely
that the legislation will :
- ban any discriminatory procedures in recruitment on the
grounds of age - this includes workers at any age, not only
- outlaw age-related harassment in the workplace on the
lines of current gender equality legislation
- outlaw workplace benefits that are age-related (which
could be bad news for some older workers)
- set a default retirement age of 65 - so outlawing
arbitrary earlier retirement ages, and also giving the worker
at 65 the "right to request" to continue working beyond this
age. As with the recent
parental flexible working rights, the employer is obliged
to consider this request.
But there is no right to request flexible working associated -
just a right to request continuing to work.
These provisions are thought not to go far enough by
campaigners, but are thought to be potentially very costly by
employers' organisations. Due to the loose ends lawyers
are outwardly furrowing brows, while inwardly beaming with
delight at a potential new income stream.
It's a first step. Effectively it will introduce a
flexible retirement age. But this does not mean that
employers will address flexible retirement issues.
Some barriers are being removed, but it will take more than
this legislation to encourage discouraged older workers to
re-enter the workforce, and to make people approaching
retirement want to continue working.
Greater flexibility in working arrangements should be part of
the equation, but that is also not the whole answer.
Pensions provision needs also to move into a new era of flexible
retirement, so that workers know they will not be penalised in
any way for continuing to work or by adopting flexible working
practices towards the end of their working lives.
But in any area of life, governments will only do so much.
Employers can take the lead in making themselves the "employer
of choice" for older workers, by enabling working patterns that
meet the needs of this section of the labour market.