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Inequalities in retirement

The challenges posed by inequalities among an ageing population and more precarious working lives came under the microscope at our latest Vital Topics debate.

Panellist Chris Phillipson, Professor of Gerontology at The University of Manchester, said the recent move to extend the State Pension Age (SPA) was a “controversial one which we have taken lightly”.

He said the SPA was increasing at a time when more than half of adults had left the workforce in the year before the SPA, while a quarter had not worked for five years before the SPA. “We are making people wait longer for the state pension, yet a high proportion of people are already out of work for some considerable period of time before they have the chance of getting the pension.”

He added that this move towards increasing the SPA was also happening at a time when work itself was becoming more insecure and precarious. 

He called for more investment in training and lifelong learning, and more adoption of a ‘life course’ approach which allowed people to take career breaks, sabbaticals, or work less days a week. “What we have to strive for is not just good work and extended work, but a good retirement.”

Greatest achievement

Debora Price, Professor of Social Gerontology at The University of Manchester and Director of the Manchester Institute for Collaborative Research on Ageing, said retirement was the greatest achievement of the 21st century.

She has been part of a major national research project on extended working lives which she said had unearthed deep-rooted inequalities in old age.

“When we look at who is working in the five years before and after SPA, this is a very unequal poll. The people who are in work are, by and large, healthy, privileged, higher earners who are highly educated and have assets, while they also often having partners who are healthy and also in work.”

She said studies of people working beyond SPA had found that about two thirds were choosing to work for positive reasons, but a third were working because they had to. “For those people their quality of life is made worse by work. Yet retiring from a stressful job has been shown to improve your mental and physical health.”


Panellist Vincent Reboul, Managing Director of Hitachi Capital Consumer Finance, said from an employer perspective there were three groups of people to consider in the debate about people approaching retirement.

Firstly there are those who want to stay in work because they consider that they are adding value to the business and have no financial pressures, secondly those who have to stay in work out of financial necessity, and thirdly those who are more flexible and perhaps want to retire early.

“As an employer we are beginning to look at a number of scenarios for those three groups of people. There is an awful lot of work to be done on this by employers who have a big role to play and have to move towards more flexibility.”

Fellow panellist Shri Rengasamy from global consultancy Mercer said we were currently seeing record low levels of contributions into pension arrangements. Yet for people to get “gilded, defined benefit, final salary type pensions” they should be saving up to a quarter of their salary.

“The picture is even worse if people start taking breaks from their career. We need to change the whole notion of pension savings and retirement savings. The act of working and your income could be your pension in later life, although we have seen greater awareness to make retirement savings more flexible.”

The discussion was chaired by David Sinclair from the International Longevity Centre.

Vital Topics is supported by BNY Mellon.