Retirement income and assets: the implications for retirement income of Government policies to extend working lives
The sixth report in the PPI's Retirement Income and Assets series considers the implications for retirement income of Government policies to extend working lives. The research examines how much longer today’s over 50s in England in 2011 might need to work and save to meet target levels of retirement income. The report is the sixth in a series of research reports on retirement income and assets in the UK.
In the UK over the last three decades, life expectancy has increased substantially. In 1981 a 65 year old man could have expected to live for another 14 years on average, to age 79. However in 2011 a 65 year old man can reasonably expect to live for another 21 years, to age 86 on average. These substantial improvements in life expectancy reflect a complex range of changes in lifestyle, diet, healthcare and patterns of work and economic activity. Improvements in life expectancy could be positive for individuals.
However, increased life expectancy also poses significant challenges to individuals, to employers and to the Government. Individuals who live longer may have increasingly long retirements to save for and support, employers who sponsor Defined Benefit schemes face increases in the costs of providing these pensions and the Government may face increased pressure from funding the state pension and benefits for pensioners.
This research examines current patterns of work and retirement in the UK among people over age 50 and considers how these might change in the future. The Government has introduced a range of policies and programmes aimed at extending working lives such as policies aimed at moving people off benefits and into paid work, changes to the age at which people can receive state pension and benefit income, and the removal of legal barriers to working longer. The research looks at international experience of similar policy changes and considers what lessons the UK might learn from them. Finally, the research considers what patterns of work and retirement might mean for income adequacy in retirement.