Reinventing the concept of retirement key to solving aging workforce dilemma

Ros Altmann
The UK needs to change its concept of retirement (Source: Getty)

We are in the middle of a fundamental demographic shift that has significant implications for businesses across the UK.

By 2022 there will be 700,000 fewer people aged between 16 and 49, yet 3.7m more people aged between 50 and State Pension Age.

Meanwhile, the employment rate starts to fall dramatically as people reach their 50s and continue through to their early 60s. Just 69 per cent of 50 to 64-year-olds are in paid work compared to 83 per cent of their younger counterparts.

This raises serious questions about how we are going to continue to grow our economy with a diminishing pool of younger workers to call upon.

For me the answer is clear: we must change the concept of retirement and reconsider the way we think about recruiting, retaining and retraining older workers.

Read more: Britain’s ageing population could boost economic growth – if we adapt

There is a large pool of talent currently sitting un-tapped, and reinventing “retirement” as a period of part-time work for those who want it, before stopping altogether, has many benefits.

Giving working people the chance to get on at every stage of their lives goes right to the heart of the Government’s long -term economic plan. We want everyone to have the dignity of a job, the security of a pay cheque, the chance of a home of your own and a decent, well-earned retirement when they are ready to stop.

We cannot possibly achieve that if hundreds of thousands of working people are just written off in their 50s, or indeed write themselves off after losing confidence.

We are working hard to change attitudes among employers, and scrapped the default retirement age for precisely this reason.

To support people who are looking for work, we have also introduced regional Older Workers’ Champions across the Jobcentre Plus network. And older people who are looking for work can benefit from a range of support to help with job search, training and improving their skills.

But this is not enough. While we are starting to see signs that the outlook might be changing there remains a huge amount of work to do.

There are 10.2m people aged between 50 and State Pension Age, and around one in three are not in work. Government alone cannot deliver the cultural shift that is so badly needed; businesses themselves have a key part to play in making their workplaces as age diverse as possible.

And there are enormous benefits to doing so. Older workers bring with them valuable knowledge and experience, and research shows that employers believe they are just as productive as younger workers.

What’s more, a mixture of older and younger staff may appeal to a business’ older customers or clients, and can bring a better understanding of their needs.

And facilitating more flexible working can make the most of people’s skills while also improving their work/life balance in later life.

Read more: Which parts of the UK are most scared about funding retirement?

It is encouraging that the message appears to be getting through, including in the City of London. Many businesses are taking the lead when it comes to changing recruitment and retraining practices across a number of sectors.

As an example, earlier this month Barclays put on record its commitment to creating career opportunities for older workers when it unveiled its Bolder Apprenticeship programme, effectively scrapping the age limit that was previously in place.

Hopefully other financial institutions will now look for similar ways of appealing to older workers. I cannot stress highly enough the importance of doing so, not just because it is in the interests of individuals, but because it is the interests of our economy too.

Society is changing before our eyes and businesses need to move with the times or risk being left behind.

This represents a tremendous opportunity to boost economic growth, both short-term and in the future. Higher individual and national incomes mean better lifestyles for all.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Related articles