The government’s decision to up the state pension age from 65 to 66 has seen higher number of 65-year-olds staying in work than at any point since at least the 1970s.
However, poorer people with less education were significantly more likely to stay in work than richer people with university degrees.
Becky O’Connor, Head of Pensions and Savings, interactive investor, said: “Many people work for longer because they have to, not because they want to. If someone is healthy, well, and enjoys work, there are many benefits to continuing to do so, even if they have enough money to retire.”
Following the government’s decision to raise the state pension age from 65 to 66, for both men and women, the proportion of 65-year-olds remaining in work reached their highest rates on record.
By mid-2021, a record 42 per cent of 65-year-old men and 31 per cent of 65-year-old were in paid work, figures from the Institute for Fiscal Studies show.
The record highs come after the decision to raise the state pension age saw the employment rate for 65-year-old men increase by 7.4 per cent and the employment rate for 65-year-old women increase by 8.5 per cent.
The increases resulted in 25,000 more men and 30,000 more women staying in work in 2021, than would have been the case if the government had kept the pension age at 65.
In its report, the IFS said noted that “essentially none of the extra employment of 65-year-olds comes from new jobs” and that almost all of it came from people staying in existing jobs for longer.
However, 65-year-olds living in deprived areas were more likely to stay in work than those living in more prosperous areas, with 13 per cent of women living in the poorest areas staying in work compared to just 4 per cent in the least deprived areas.
At the same time, 13.6 per cent of 65-year-old men with no qualifications stayed in work compared to 4.1 per cent who had taken a course of higher education.
“Old ladies are presumably not filling up supermarket shelves because it gives them a sense of identity or keeps their mind challenged. I am sure many could think of other things they would prefer to be doing, but the truth is, they don’t have a choice,” O’Connor said.