We retire later than ever – and the gap is growing

The average woman retires at 64.3 to the average man’s 65.2, and more of the over-50s stay in employment.

Older women are waiting more than a year longer to retire than their male counterparts compared with two decades ago, analysis shows.

Research by the Department for Work and Pensions found men are giving up work on average at age 65.2, up 1.9 years since 2000.

In contrast, women are now working 3.9 years longer, with the average labour market exit rising from 61.2 years old in 2000 to 64.3 in 2020.

The data also showed the employment rate of the over-50s has been increasing with time.

The employment rate for 50- to 64-year-olds was 55.8% in 1984 and is now 72%.

For those aged 65 and over, the employment rate increased from 4.9% in 1984 to 10.4% in 2020.

Working longer can help boost your retirement income, but insurance company Canada Life warns this data shows the importance of supporting older people in the workplace.

• Better advice needed on access to pension income
• Pension savers told only more risk will beat low returns

Paul Avis, strategic propositions director for Canada Life, says: “Commercially, it’s easy to understand why employers tend to focus on the recruitment and training of young workers, but we have a duty to our older employees too. 

“A diverse workforce is a truly wonderful asset for any businesses to have, as it aids the sharing of skills and experience and it brings different perspectives to the table. 

“Without it, young people entering the workforce are missing out.”

Pam Hamilton, managing director of business consultancy Paraffin, says an older workforce creates a cultural challenge for businesses and staff.

• Retirees must adjust to lower pension fund returns
• Fear of poverty in retirement rises

She says older generation staff may stereotype millennials as being entitled or unprofessional, while millennials sometimes view older colleagues as being unable to grasp technology, both of which are incorrect.

Hamilton adds: “This polarisation may get worse with Generation Z employees – those born in the mid-1990s - entering the workforce, as they challenge the millennials’ ‘digital native’ status and will probably take employers and colleagues to task more than previous generations on ethical issues.

“Bigger companies in particular are now a hotchpotch of generational cultures that can be difficult to manage. The key is to help people to value the complementary skills each brings to the table, rather than allowing their differences to become more entrenched.”