The Department for Work and Pensions is set to increase the state pension age, a move that could significantly affect household finances. The state pension age is rising from 66 to 67 as part of a phased rollout by the Labour Party government.
Potential Benefits for Some Workers
Dr Kathy Hartley, Interim Subject Head of the Human Resource Management Group at the University of Salford, suggests that certain individuals could actually gain from both current and upcoming state pension age increases. She notes that some workers have been choosing to remain in employment beyond the previous norm, especially since the default retirement age of 65 was removed in 2011.
"For some, this is clearly beneficial financially, even if it involves reduced hours or less strenuous forms of work, particularly in the context of rising living costs," Dr Hartley said. "Others remain in roles they find intrinsically interesting, feel motivated and healthy, and see no reason to stop."
Portfolio Careers and New Challenges
Some older workers decide to take on new challenges, working part-time in their current field while combining this with other forms of work that have interested them for some time. This effectively creates a new or 'portfolio career' later in life, Dr Hartley explained.
Importance of Financial Literacy
Dr Hartley emphasized that many people need greater financial literacy, or simply to pay closer attention to the state of their pension pot and what kind of future it is likely to provide. "For more of us to have genuine choice over whether to stay in the workplace for longer, financial understanding and planning will be key, as will employer support in relation to flexible working and adjustments," she added.
Such support has increased in recent years, driven by changes in employment law, and the need for this—along with open conversations about employees' longer-term aspirations—is unlikely to lessen.
Younger Generations and Employment Trends
Dr Hartley also noted that younger people are less inclined to rush into paid employment than previous generations. Pressure on entry-level jobs, combined with expectations of working into one's later years (70 and beyond), may help explain some of this hesitancy.
