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In light of proposals to increase the State Pension Age faster than currently planned, and the likely abolition the Default Retirement Age, a new discussion paper by the International Longevity Centre-UK sets out why people retire when they do and examines how this may change in the future.

The paper finds that

  • The meaning of retirement was originally bound up with the receipt of a pension, but most people do not retire at State Pension Age;
  • Good pensions coverage generally increases the likelihood of early retirement, and vice versa. Other things being equal, low-paid/low-skilled workers retire later due to financial compulsion;
  • Over the long-term, defined contribution pension schemes are likely to encourage later retirements, in part due to their inherent incentive structure, but also because they tend to be less generous that defined benefit schemes; and
  • Many older workers seem to favour a gradual transition from work to retirement. Such arrangements could help people to cope with care responsibilities.


ILC-UK recommends that, if working lives are to be extended, and the government needs to give more attention to:

  • Preventative healthcare throughout the life-course;
  • Job quality for older workers;
  • The potential of ‘gradual retirement’, including encouraging employers to offer downshifting options to staff approaching retirement at all levels;
  • Simplifying the pensions system and improving the provision of advice; and
  • The support offered to older people with caring responsibilities.


Dr Craig Berry, author of the report and Senior Researcher at ILC-UK said “Proposals to increase the State Pension Age and abolish the Default Retirement Age will have an impact on individual retirement decisions. They will not automatically lead to longer working lives, and Government must not develop its policies in this area without looking at the reasons people retire when they do. The Government needs to consider how it can best incentivise and support us to work longer in sustainable ways. The introduction of policies to encourage ‘gradual retirement’ have to be part of this picture”

To download the report, click here: The Future of Retirement

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