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Money & Rights

Is it worth working for longer?

Enabling people to stay in work for longer can benefit individuals and society, says a government report. Teri Harman examines the evidence and the rights of older workers

BY 2020, it’s estimated over-50s will make up a third of the British workforce.

Government statistics show the employment rate for people aged 50 to 64 has grown from 55.4 to 69.6 per cent over the past 30 years and the rate for people aged 65 and over has doubled from 4.9 to 10.2 per cent. This equates to some 9.67 million over-50s still working, more than at any time since records began.

This rise is largely explained by the increasing number of women aged 50 to 64 in work. Over the past 30 years the employment rate of women in this age group has risen by 22.3 per cent to 64.2 per cent. And in 2015 the numbers taking early retirement fell from a peak of 1.6 million in 2011 to 1.2 million.

These trends prompted insurer Aviva to predict that by 2029 early retirement “would be relegated to the dustbin of history”.

It’s not just older people staying on at work that is a growing trend, but research in 2015 by Prudential estimated that more than one in five pensioners (21 per cent) have gone back to work since they reached State pension age (SPA). What’s more, in the four years to 2015, an estimated 14,000 people over 50 launched their own business, triple the number started by those under 24. For many people, working for longer may be a personal choice, and there is an increasing body of evidence that for most people work is good for personal health, as well as the nation’s economic prosperity.

In a report last year, Professor Dame Sally Davies, the Government’s chief medical officer, said “staying in employment is also a significant contributor to self-esteem”. She even suggested “the continued social engagement that some people find in employment may defer the onset of cognitive decline and reduce the risk of dementia”.

For many, however, working for longer is not a choice but an imperative. With rising State pension age – going up to 66 by October 2020 for both men and women – the decline of more generous defined benefit occupational pension schemes and greater longevity, a growing number of over-50s simply cannot afford to retire. And while working may be fine and dandy if you are fit and healthy, and in a relatively stress-free or sedentary job, Dame Sally concedes that “not all work is good for all people”. She says that despite the growth in employment for older workers, 20.4 per cent of men and 8.5 per cent of women still leave work in the five years before they reach SPA. In the case of men, nearly half (46 per cent) of those retiring early are doing so because of ill-health.

Research in January by the TUC also found that nearly half a million workers who are within five years of State pension age have had to leave the workplace for medical reasons, and its analysis revealed a stark North-South divide. In the South West, sickness and disability is cited by just one in 13 of those who have left work in the run-up to SPA, followed by one in 11 in the South East and East of England. This rises to one in seven in Yorkshire and the Humber, the North East, the North West, Wales and Scotland, and one in four in Northern Ireland, reflecting wider health inequalities across the regions and nations of the UK.

Early retirement through ill health (or redundancy) has a negative impact on the public purse, as well as on individuals, with an estimated £7bn paid each year in out-of-work benefits to people between the age of 50 years and SPA.

The rights of older workers

Under the Equality Act 2010 it is unlawful to discriminate against employees and job applicants because of their age and there is no upper age limit on claims for unfair dismissal. In October 2011 so-called ‘default retirement age’ – the age at which an employer could insist that an employee retire – was abolished, meaning your employers cannot force you to retire on the grounds of your age, nor single you out for redundancy in favour of younger colleagues, unless they can ‘objectively justify’ it. This phrase is open to interpretation, but an example would be employees doing a physically demanding job who could be made to retire at a certain age, for health and safety reasons. If you think you have been unfairly dismissed, you need to lodge a complaint with the Employment Tribunal within three months of your dismissal.

There are four types of age discrimination:

Direct discrimination–

an employer refuses to offer a job to an older person.

Indirect discrimination-

can occur when a policy, practice or procedure disadvantages an older employee.


any unwanted conduct, or creating an intimidating, hostile, degrading or humiliating environment for an individual related to age.


unfair treatment of an employee who has made or supported a complaint about age discrimination.

Employers should not include age specifications in job advertisements and should avoid using phrases which could suggest they are looking for a particular age group: for example, “ten years’ experience required”.

Employers are allowed to ask for an applicant’s date of birth, but this should be kept on a separate form from the application and must not be used as a deciding factor in offering someone a job.

In work, all employees have the right to reasonable time off to deal with emergencies involving someone who depends on them for caring responsibilities. They do not have to pay you for this time off, but some employers will do so under the terms and conditions of employment.

Every employee also has the statutory right to request flexible working after 26 weeks of employment.

Starting your own business

In the eight months to last August, figures from the Go v e r nme n t - b a c k e d scheme, the Start Up Loans Company (SULCo), showed that 612 people aged 50 and over founded their own company with its backing. Looking at these new 50-plus business owners’ prior employment status, 42 per cent were previously unemployed, 35 per cent were already self-employed and 20 per cent left a full or part-time job.

Data from the Office for National Statistics also shows more than 40 per cent of the UK’s self-employed people are now 50 and over.

SULCo was formed in June 2012 on behalf of the Department of Business, Innovation and Skills. It provides loans of up to £25,000 at six per cent fixed annually and offers dedicated mentoring and support to each business. SULCo’s CEO Tim Sawyer says: “We saw some cases where people in their 50s were made redundant and struggled to find a new job. It is very encouraging to see them turning an unpleasant situation into a positive by becoming their own boss.”

Research by Prudential found that rates of selfemployment among women were up 22 per cent in the four years to 2016, double the rate of increase for male self-employment over the same period

Other research shows that so-called ‘olderpreneurs’ are often more successful than younger founders and that start-up failures in this age bracket are exceptionally low, with 95 per cent still in business a year or more after starting up, compared with the national average of 66 per cent.

The Cranfield School of Management says businesses run by owner-managers over 50 drive up revenues at their companies three-and-a-half times faster than GDP growth, and older entrepreneurs create jobs at a rate more than seven times faster than the UK economic average.

Research from Samsung Electronics claims there is a new wave of professionals turning their hobbies and passions into careers, leaving their jobs to become ‘funtrepreneurs’. Silly names aside, start-ups are a serious business, and if you have aspirations to do follow this exciting, if somewhat daunting, path there is a wealth of help and information available.

Choice will also be covering this subject in greater depth in a future issue.



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