The idea of early retirement will appeal to many marketing professionals heading into their mid or late 50s. But how easy is it these days? You need to be financially secure and confident that departing the marketing job market forever won’t leave you regretting the move two or three years down the line.
The trend in the job market seems to be away from early retirement right now – probably because of the recession and the fact that fewer people have the financial resources to support a lifestyle without work. People are also fitter and healthier later in life these days thanks to advances in modern medicine and better health care, and there seems to be a desire to stay active and remain involved in working life, rather than face a longer retirement. It seems the rewards of job satisfaction and social interaction at work have a lasting appeal to today’s over 50s.
According to a survey by Aviva 55% of 55- to 64-year-olds were earning a wage in December 2012 – up from 41% in February 2010. Another key finding was that one in three over-55s plan to continue working part-time when they do finally retire.
The post-war baby-boomer generation is now hitting retirement age and this will have an impact on the number of older people thinking about working on beyond retirement age. The Office for National Statistics (ONS) calculates that almost 6.5 million people will turn 65 over the next decade, compared with 5.2 million in the previous 10 years.
Aviva’s research suggests that many people within this baby-boomer generation will continue working past the default retirement age. The report said 23% of people aged 65 to 74 were still earning a wage in December 2012, compared to just 18% in February 2010.
Aviva found that 80% of the 14,600 people it interviewed were concerned about rising living costs over the next six months, which suggests that much as they’d like to put their feet up and do the crossword, they will need to keep working whether they want to or not.
The attraction of part-time work
Many older people rely on self-employment for their income later in life, but it seems growing numbers will be looking for part time work too. Part-time is considered the best of both worlds for many – having time to enjoy family, hobbies and trips abroad, but also benefiting from the financial and social rewards of working.
People in this group are probably wary of not being able to claim a state pension until they have reached the correct age. There’s also a good chance that they’ll get less than if they’d carried on working, having not built up enough National Insurance contributions (NIC) or because a company pension needs to be paid over a longer period to make it worthwhile. So if part-time solves the problem it will be an attractive option.
Many employers from the leading retail groups to local government offices can see the benefit of hiring older people with plenty of experience and skills and an eagerness to enjoy a good work/life balance. The hope it that they will extend the number of part-time workers they employ to facilitate this growing trend for older people working part-time.
Retirement: The Legal Situation
People who want to work on into their 60s will be pleased to learn that the default retirement age has been phased out. This means if you didn’t receive notice from your employer before 6 April 2011, you can’t be made to retire using the default retirement age of 65 – unless they can justify it.
You are entitled to a state pension if you have paid or been credited with enough National Insurance contributions (NICs) through work or voluntary payments:
• Men born before 6 April 1945 need 44 qualifying years
• Women born before 6 April 1950 need 39 qualifying years
• Men born on or after 6 April 1945 need 30 qualifying years
• Women born on or after 6 April 1950 need 30 qualifying years
Because we’re living longer, the Government is adjusting the rules around the State Pension to accommodate for an increased and older population. Under the Pensions Act 2011, the State Pension age for both men and women will start to increase from December 2018, to reach 66 in October 2020. This applies to women born on or after 6 April 1953 and men born on or after 6 December 1953.
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