16 June 2010
This ILC-UK discussion paper considers the reasons people retire when they do, and the potential future of retirement given policy change and the emergence of gradual retirement.
An ILC-UK discussion paper which looks at the factors that impact on retirement decisions, and consider how the process of retirement will change in light of current socio-economic trends.
There is evidence that the UK’s average retirement age has started to rise after falling for several decades in the postwar era. But policies such as the raising of the state pension age, and the abolition of the default retirement age, will further transform the financial and policy contexts within which retirement decisions are made.
This paper therefore considers the factors that lead individuals to retire when they do. It looks at current socio-economic trends, to ask whether the future of retirement will match policy change, and what government can do to enable people to extend their working lives.
The paper also considers the prospects for gradual retirement, that is, whether the possibility of ‘downshifting’ work commitments as we approach retirement is a realistic and sustainable future.
It makes a series of recommendations about the areas that require more attention by policy-makers:
• Preventative healthcare throughout the lifestage;
• Job quality for older workers;
• The potential of ‘gradual retirement’, including encouraging employers to offer downshifting options to staff approaching retirement at all levels;
• Complexity and the provision of advice in the pensions system; and
• The support offered to older people with caring responsibilities.
Author: Craig Berry, Senior Researcher, ILC-UK