Employees worried that their earning potential might decline as they get older need not be concerned, as salaries for workers aged 60 and over have massively increased over the last 20 years.
Recent figures have shown middle-income 60 to 74-year-olds have total salaries that are 60 per cent greater than they would have been in the mid-1990s. Furthermore, their earned income has risen by a significant 160 per cent during the same period.
This is likely to be down to more people working for longer, as health among older people has dramatically improved. Lots of employees also worry about the state of their pensions and, subsequently, want to work more years to add to their retirement fund.
Carl Emmerson, deputy director of the Institute for Fiscal Studies (IFS), which revealed the statistics, spoke at the IFS at 50 talk recently.
He stated income increases have risen so dramatically over the last 20 or so years as “private pensions and earnings have grown”.
“There is much capacity for employment rates of older individuals to rise further: for example, employment rates of men aged 60 to 64, which have been increasing since the mid-1990s, are still well below the rates seen in the 1970s when life expectancy was much lower and health less good,” Mr Emmerson said.
According to the most recent figures from the Office for National Statistics (ONS), the UK employment rate stood at 76.1 per cent in June, which is the joint-highest on record. Similarly, its unemployment rate dipped to 3.8 per cent – the lowest it has been since between October and December 1974.
While the number of 16 to 64-year-old men in jobs increased slightly over the year from 80 per cent to 80.3 per cent, the number of women in work between February and April 2019 was the highest it has been since records began in 1971. Indeed, the female employment rate reached 72 per cent, which the ONS suggested could be down to raising the retirement age.
“The increase in the employment rate for women in recent years is due partly to changes to the State Pension age for women, resulting in fewer women retiring between the ages of 60 and 65 years,” the report stated.
The State Pension Age is always rising, as life expectancy increases due to better health in later life. It is anticipated that the government will only issue pension funds to those over the age of 67 by 2028, which could see people working for even longer so they can continue to have sufficient savings.
According to the IFS, while a 50-year-old woman in 1950 would have been able to retire at 60, her life expectancy was 79 at the time, giving her 19 years of living on the state pension. However, the same aged woman these days will have to work until 68 because life expectancy has risen to 88, which means she will still have 20 years of state pension income when she does retire.
As a result of this, employers can expect a greater proportion of staff members to be older, as they have to stay working for longer than previous generations would have.
This could mean businesses need to expand their office space to fit in a larger workforce. For new offices to rent in Liverpool, take a look here.