Changing the Perception          of Retirement                        1 March 2012           Twitter - #retirementpercepti...
WelcomeBaroness Sally Greengross                                  ILC-UK             Twitter - #retirementperception  This...
The ‘unavoidable obligation’ ofworking longer: do we want our       working lives extended?    Professor Sarah Vickerstaff...
Sarah VickerstaffThe ‘unavoidable obligation’ of workinglonger: do we want our working livesextended?
On the threshold of a new era?In an era of workforce ageing andincreasing life expectancy working longermay be presented a...
‘If only we could print more taxpayers’Banx FT 26.3.09
Where we are now?•   UK has moved away from „mass fixed age retirement‟ and we now have more    individualised experiences...
Assumptions of the extending working life agenda    •   Individuals are still choosing to retire too early    •   Individu...
Insights from qualitative research• Commissioned by Department for Work and Pensions –  „Extending working lives‟• Intervi...
Do people want to work for longer?    •   There is a conundrum in existing research on        what older workers want    •...
Surveys   •   McNair and colleagues in 2003/2004 found       that „older people are strongly attached to work       (thoug...
Qualitative research    •   Desire to extend working life seems much more        qualified    •   A focus group based stud...
Choice and Planning    •   Unexpected health events, including illness of partner or        other family members    •   Ca...
Overview of attitudes : would considerworking for longer or after retirement    •   Strong gender differences: women give ...
The social embeddedness of decisions •   A common assumption is that people will work longer if they     cannot afford to ...
Couples • Decisions around retirement most often taken as a couple and very      heavily influenced by domestic contexts a...
The gender contract                      17
Health pessimism  • People understand that we are living longer    but concerns over future health reinforced    tradition...
Preference for part-time flexible work The idea of part-time paid employment, that is something I        certainly will co...
Realistic part-time aspirations?    I didn‟t want to go back full-time. I would go back part-time              perhaps. Bu...
The role of employers    •   Employers provide information on pensions but        not on other issues to do with continuin...
Context for change    •   The „unavoidable obligation‟ to work longer if        we live longer arrives at a time when pros...
Conclusions: the extending working lifeagenda    •   Positive views about work from older workers but        often less ha...
Conclusions: what we need to know    •   Need a much more differentiated picture of the „older        worker‟ which reflec...
We need to situate older workers in complex temporal environments:                               Health        Motivation,...
References    •   Hedges, A. Sykes, W. and Groom, C. (2009) Extending Working Life: Changing        the Culture DWP Resear...
Retirement in flux                  David Sinclair                                ILC-UK           Twitter - #retirementpe...
Retirement in fluxChanging perceptions of retirementand later lifeDavid Sinclair,Assistant Director, Policy and Communicat...
Contents History of retirement    – Retirement is a relatively modern construct Where are we now    – Retirement has gro...
What is retirement for?The International Longevity Centre-UK is an independent, non-partisan think-tank   dedicated to add...
Retirement is relatively new For most of human history, most  people have worked – either  formally or informally – up to...
Year     Early Developments1670s First organised pension scheme for Royal Navy officers.1880s Otto von Bismarck’s governme...
Pension system beginning to crack1978       The State Earnings-Related Pension Scheme (SERPS) was           introduced to ...
Retirement todayBetween 1881  and 2008 the  economic  activity rates of  UK men aged  65+ fell from  74 per cent to  10 pe...
Retirement today The average retirement age for  men is 64.5 years, and for women  62.4 years (ONS) Vast majority of peo...
Where are we now – The happy side Recent upwards trend in  effective retirement ages Staying in work for longer  has a p...
But it’s not all positive Faltering growth and the end of generous pension  provision, may create a compulsion to work fo...
An era of reform2005 The Turner Commission: Work longer, poorer pensioners     or pay more. Proposals: Reduce ‘qualifying ...
Challenges ahead The increasing fiscal burden of an ageing society & the  possibility of intergenerational conflict as to...
Citizenship in retirement                                     Citizenship implies that, in return                         ...
Citizenship and pensions UK pensions system has moved  away from the notion of  citizenship, and towards  individualised ...
We have designed much of our public policy concerning older people according to an image of life after 65 that is now redu...
What should we expect to contribute?What kind of contributions    should people be making    in return for this support,  ...
Rights and responsibilities: EmploymentOlder citizens have a   responsibility to remain in   the labour market, where   po...
Rights and responsibilities: Employment 46 % would consider delaying retirement if their  employer offered support for re...
Rights and responsibilities: Volunteering                                  The idea of an obligation to                   ...
More time for volunteering? 73 per cent of EU residents do not  undertake any formal voluntary  work. Half report they w...
Rights and responsibilities: Housing andcare Older people should have a right  to remain in their own home. It is  vital ...
Citizenship at end of life Do older citizens, in an ageing society,  have a right to have their lives  prolonged for as l...
Conclusions Over 20 years we have gone from crisis  to crisis, slowly recognising that  longevity means we cant fund the ...
 There is a role for Government. We need  national “retirement” strategies/policy  incorporating all Government activitie...
And we must move quicker on gradualretirement ‘gradual retirement’ should  provide a potential solution to  the challenge...
 We need to abandon the notion that people make  contributions in their working life in return for support in  retirement...
Better LifeI am Richard and I am perfectly able-bodied thank you and   also of perfectly sound mind. What can I do for you...
Older Workers - trailer 1948The International Longevity Centre-UK is an independent, non-partisan think-tank   dedicated t...
Many thanksDavid SinclairHead of Policy and ResearchInternational Longevity CentreDavid.sinclair@ilcuk.org.uk02073400440Tw...
Changing the perceptions of                Retirement                 Stephen Balchin                                     ...
Changing Perceptions of RetirementStephen BalchinRedefining Retirement DivisionDepartment for Work and PensionsStephen.bal...
We‟re Living Longer Healthier LivesLife Expectancy, and Healthy Life Expectancy at 65, ONS 25 20 15 10  5      1981 1983 1...
1 in 4 children bornAnd life expectancy has been on the                                                                   ...
So why does it sound like   there’s a problem?
Problem 1: Our conception of „old age‟ is out of date• We base assessment of likely health on our parents and grandparents...
Problem 2: Baby boomers mean we haven‟t had to thinkabout this too much                                                   ...
So despite longer lives we‟ve managed to work for less   Male average age of exit   from labour force                     ...
Problem 3: The „deal‟ with the state, and with wider familynetworks continues to change• Over the last 50 years state has ...
Problem 4: We‟re not very good at planning•   Inertia – don‟t do now what you can put off to tomorrow•   We‟d prefer to ha...
And bad at planning impacts on more than finances,Are you planning to stay healthy into old age?                          ...
Problem 5: changing health needsBetter medicine means:   • People survive with conditions which we‟re previously fatal.   ...
Some things are already changing: work and pensions     Average Age of Leaving the Labour Market                          ...
But what next?Could be..Employers:• More 50 year olds doing apprenticeships• Flexible working, and movement between types ...
Changing the perception of                retirement                       Daniel Ryan                                Swis...
Changing the perception ofretirementDaniel RyanHead Research & Development, Life & Health1 March 2012
Global ageing populationsShared perils and promisesDaniel Ryan | Changing the perception of retirement | 1 March 2012   73
Rapid growth expected for the oldest old                                                                     Source: Depar...
Trends in pensionable ages                                                                     Source: Pensions at a glanc...
Retirement villages York, UK                                                                     Source: Hartrigg Oaks, Jo...
Retirement villages Perth, Australia      Source: Ocean Gardens Retirement Village, Perth, Australia. www..oceangardens.co...
But we are not saving enough for this long retirementThe average annual amount individuals would have to save in order to ...
Italy: The Manzo family of Sicily               Food expenditure for one week: 214.36 Euros or $260.11Daniel Ryan | Changi...
Germany: The Melander family of Bargteheide              Food expenditure for one week: 375.39 Euros or $500.07Daniel Ryan...
United States: The Revis family of North Carolina                            Food expenditure for one week $341.98Daniel R...
Obesity trends in US adults1990                                                                                Source: CDC...
Obesity trends in US adults2000                                                                                Source: CDC...
Obesity trends in US adults2010                                                                                  Source: C...
Old age eroding our physical capabilities               Hand grip strength reduces by 45% by age 75               Blood ...
Understanding the challenges of old age  Source: The Koken Aged Simulation SetDaniel Ryan | Changing the perception of ret...
Longer lives – implications for healthcare         Survivors and deceased in regional study in Italy                      ...
Teaching Geriatric in Medical Education study               Collaborative study of WHO and International Federation of   ...
TeGeMe – GERIND index vs. age of populationSource: World Health OrganisationDaniel Ryan | Changing the perception of retir...
Putting individuals at the centre of healthcare   Health systems must evolve in response to the ageing of society to    o...
A final word of thanksto our sponsors in retirementDaniel Ryan | Changing the perception of retirement | 1 March 2012   91
Thank you
Legal notice©2012 Swiss Re. All rights reserved. You are not permitted to create anymodifications or derivatives of this p...
Changing the Perception          of Retirement                         1 March2012           Twitter - #retirementpercepti...
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ILC-UK and the Actuarial Profession debate: Changing the perception of retirement. Supported by Swiss Re

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For the third year in a row. ILC-UK launched into the new year with events in both Scotland and England. These events, in partnership with the Actuarial Profession, and supported by Swiss Re, explored how the perception of retirement is changing and could change in the future.

The original concept of retirement is being eroded. Increasing concern over the costs of retirement has led to a shift of responsibility from Government and the corporate sector to the individual. The State Pension Age has been increased and public and private pensions are being scaled back.

Individuals are likely to have to work longer, contribute more and receive less than earlier generations. However, we need also to reflect that the older population is a very heterogeneous group, and the current balance of public and private funding will vary dramatically across the population.

At the same time we have seen dramatic improvements in life expectancy, and there is a huge opportunity (a longevity dividend) if further increases in life expectancy are spent in good health. This is certainly the case if we don’t just prolong survival for those with disease but delay the onset of disease and its progression. This requires flexibility in encouraging those that can work to work beyond current state pension ages and in focusing healthcare to those that will benefit. It also means changing people's behaviours towards work and retirement by highlighting the implications and restrictions of a long life beyond retirement, dependant on state funding.

At these events we highlighted particular initiatives that might help this period of transition - for example:

• developing agreed metrics of health status;

• cross-generational sharing of concerns so that each generation understands the challenges faced by others;

• moving towards patient-centred healthcare where geriatricians and GPs consider the holistic health of the individual;

• recognising the benefits and costs of preventative medicine and avoiding the trap of always assuming preventative medicine is preferable because it will cost less (it may not);

• provision of a suitable level of post-retirement income for all members of society and understanding what balance of public and private pension provision can help in this aim.

Following these events, the ILC-UK will launch a think piece which will explore the debate outlined above.

Agenda from the event

16:30 – 16:35
Welcome and introduction from chair Baroness Sally Greengross, Chief Executive, International Longevity Centre – UK

16:35 – 16:50
Sarah Vickerstaff, Professor of Work and Employment at the School of Social Policy, Sociology and Social Research, University of Kent

16:50 – 17:05
David Sinclair, ILC-UK

17:05 – 17:20
Stephen Balchin, DWP

17:20 – 17:35
Daniel Ryan, Swiss Re

17:35 – 18:30
Discussion and Q&A

Published in: Economy & Finance, Business
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ILC-UK and the Actuarial Profession debate: Changing the perception of retirement. Supported by Swiss Re

  1. 1. Changing the Perception of Retirement 1 March 2012 Twitter - #retirementperceptionThis event is kindly supported by Swiss Re
  2. 2. WelcomeBaroness Sally Greengross ILC-UK Twitter - #retirementperception This event is kindly supported by Swiss Re
  3. 3. The ‘unavoidable obligation’ ofworking longer: do we want our working lives extended? Professor Sarah Vickerstaff University of Kent Twitter - #retirementperception This event is kindly supported by Swiss Re
  4. 4. Sarah VickerstaffThe ‘unavoidable obligation’ of workinglonger: do we want our working livesextended?
  5. 5. On the threshold of a new era?In an era of workforce ageing andincreasing life expectancy working longermay be presented as an:‘unavoidable obligation’ (Reday-Mulvey 2005: 195)‘a fiscal and social imperative‟ (PWC, 2010)Or simply:live longer work longer (OECD, 2006)
  6. 6. ‘If only we could print more taxpayers’Banx FT 26.3.09
  7. 7. Where we are now?• UK has moved away from „mass fixed age retirement‟ and we now have more individualised experiences of retirement (for example: Rees Jones et al 2010)• More difficult to say when „retirement‟ happens• Survey data steers us towards health, finance, job security, marital status and caring responsibilities as the key determinants of retirement timing, but in the messy reality of domestic lives and relationships it is the interaction of such variables, which will determine actual outcomes• Surveys leave a lot of behaviour unaccounted for: people in comparable situations don‟t always behave the same way, i.e. ill-health is a major predictor of labour market withdrawal but still lots of people with health issues continue to work• This suggests that dominant „push and pull‟ models of retirement are less relevant?
  8. 8. Assumptions of the extending working life agenda • Individuals are still choosing to retire too early • Individuals are not planning and saving enough for their retirement • Focus of policy action on persuading individuals to delay retirement, make more sensible decisions • Employer action such as managing later careers, providing opportunities for downshifting, gradual retirement and bridge jobs will somehow organically appear = the target for the agenda is presented as a de-gendered and individualised „adult worker‟ in a benign employment situation (on the adult worker model see Lewis, 2007)
  9. 9. Insights from qualitative research• Commissioned by Department for Work and Pensions – „Extending working lives‟• Interviews with 96 people, data on 57 couples• Based in three areas of Britain: Edinburgh, Nottingham and Thanet• Sample selected on the basis of age (50-64), income, labour market status, health and domestic circumstances• Time-line allowed for an insight into life-course of respondents – suitable for examining process of retirement Vickerstaff, S., Loretto, W., Billings, J., Brown, P., Mitton, L., Parkin, T. and White, P. (2008) Encouraging Labour Market Activity among 60-64 year olds, DWP Research Report No. 531. Available from: http://www.dwp.gov.uk/asd/asd5/rrs-index.asp
  10. 10. Do people want to work for longer? • There is a conundrum in existing research on what older workers want • In a range of surveys, those 50 + are found to hold positive views about work, and many express a willingness to consider extending their working lives or continuing to work after they have „retired‟ • Qualitative interview or focus group–based research on the same theme reveals a much more qualified picture
  11. 11. Surveys • McNair and colleagues in 2003/2004 found that „older people are strongly attached to work (though not always their current jobs)‟ and that a high proportion said that they would consider some form of paid or unpaid work after formal retirement (McNair, 2006) • In a recent survey conducted for EHRC ¾ of a sample of 1,494 individuals aged 50-75 said that they „were currently working because, among other things, they enjoyed their jobs‟ and that „their work was worthwhile‟ (Smeaton et al, 2009) • Both surveys noted considerable variation among different occupational groups
  12. 12. Qualitative research • Desire to extend working life seems much more qualified • A focus group based study concluded that people seemed to sustain two conflicting models of retirement at the same time: one aspirational involving a vision of an active and fulfilling period of life after work the other much grimmer composed of an image of a time of decline and potential privation „Stopping work before „retirement age‟ is usually seen as a bonus and – by extension – working beyond it is a penalty” (Hedges et al, 2009:2)
  13. 13. Choice and Planning • Unexpected health events, including illness of partner or other family members • Caring responsibilities: increasing importance of grand parenting for example • Redundancy, „voluntary‟ early retirement • Combinations of circumstances: ‘And so what encouraged you to kind of finish working completely? One was the state of health of my mother….Two was the stress at work for the money that you‟re paid.‟ (NS76Female) • The language of „choice‟ about labour market withdrawal flies in the face of what we know about how the employing organisation structures retirement options, access to training and flexible working opportunities, not to mention job satisfaction and motivation issues- how realistically might work be made more attractive?
  14. 14. Overview of attitudes : would considerworking for longer or after retirement • Strong gender differences: women give social reasons or need to keep busy • Health pessimism • Preference for flexible work, part-time or short contracts: „ a little part time job‟ • In a different job • Little sense of planning for this: fantasy jobs • Work needing to fit round other aspects of life and not vice versa as had been the case during much of working life
  15. 15. The social embeddedness of decisions • A common assumption is that people will work longer if they cannot afford to retire but this study shows that whilst finance is important it was only one factor in couple‟s decision making. • Major gender differences reflecting gendered work histories and experiences  Women who had worked below their capabilities were more likely to want to stop work early  Men who had worked for 40 years or more felt that they had done their bit Once folk get to a certain age, they want to look at and do other things, I‟m sure rather than the treadmill of work. I feel that after having done 30, 40 years of work, it‟s a just rewards if you‟re able to sit back and relax.(EMale) • Domestic contexts far from static - again emphasises importance of viewing retirement as a process not an event  Highlights limitations to the notion of „retirement planning‟
  16. 16. Couples • Decisions around retirement most often taken as a couple and very heavily influenced by domestic contexts and work histories, some evidence of joint retirement timing • For many women who had not pursued careers of their own their retirement trajectories were typically contingent on their male partner‟s pathway. In particular, the male partner‟s financial situation and health and wider family caring obligations were key factors in retirement timing „How much longer do you think you’ll work for ? Heaven knows! Do you have a date in mind? A year in mind? I‟d love to go tomorrow! But no, it all depends upon the pension, on Phil‟s pension‟ (NFemale) • Relationships between couples may be changed by external shocks such as ill-health or redundancy, whilst in other couples such unanticipated events reinforce traditional ways of doing things, indicating how dynamic the factors affecting retirement are.
  17. 17. The gender contract 17
  18. 18. Health pessimism • People understand that we are living longer but concerns over future health reinforced traditional „cliff-edge‟ retirement: So from our point of view, we just want to enjoy it [retirement] while we‟ve both got health to do it. Because there‟s so many people work right to the end of their retirement, you know, whether they‟re 60 or 65, and never get a good retirement, you know, for health reasons, and, well, we feel we‟re fortunate we can do it now and enjoy it. (EFemale)
  19. 19. Preference for part-time flexible work The idea of part-time paid employment, that is something I certainly will consider. But nothing to do with teaching or education. Although teaching supply is very lucrative, it‟s not something I could even… I couldn‟t contemplate going back into the classroom.…But a wee part-time job for financial remuneration, is quite likely. (EMale) So I won‟t be doing regular work but I won‟t necessarily be stopping altogether. It‟s just so that it enables us if we want to go on holidays for 6 weeks to Spain in term time we can go because we‟ve got a caravan so we take it abroad so…(NFemale).
  20. 20. Realistic part-time aspirations? I didn‟t want to go back full-time. I would go back part-time perhaps. But then again it would have to be a very, very decent salary and short hours, and long holidays! (EFemale) …but the thing is about any job that I would want, is I need the sort of job where I can say… I‟m maybe just on the internet and looking at flights and things and “God, look at… I could fly to so and so next week for that” and I‟ll go and on the meantime you‟re on the shift that they need you at B&Q or whatever… I would need to be able to say “oh I‟m not coming in next week” and very few employers would give you that flexibility. (EMale) If I could work one day a week and just take off when I wanted I would still work but I don‟t think any companies would let me do that now. (NFemale)
  21. 21. The role of employers • Employers provide information on pensions but not on other issues to do with continuing work or managing retirement • Employers and employees may define „flexible‟ work in quite different ways • Everyone thinks gradual retirement is a good thing but not much of it happening „And they gave me a huge pension folder, if you like, telling me a whole load of stuff that you just don‟t understand.‟ Basically.‟ (EMale)
  22. 22. Context for change • The „unavoidable obligation‟ to work longer if we live longer arrives at a time when prospects in the labour market for older people are worsening • When ill health routes out of the labour market - important for a subsection of the older workforce – are being closed off • When state pension ages are rising • And when the value of pensions diminishing
  23. 23. Conclusions: the extending working lifeagenda • Positive views about work from older workers but often less happy with current job • Major differences between older workers • Not much flexible work for older workers or gradual retirement is actually happening • Job quality as well as flexibility is an important factor in extending working life • Not much evidence so far that organisations are embracing more active age management
  24. 24. Conclusions: what we need to know • Need a much more differentiated picture of the „older worker‟ which reflects the long run effect of advantages and disadvantages across the life course, i.e. impact of class, gender and race • Need a less individualised view of the older worker in the sense that most older workers are thinking about and making decisions about working and retirement in a specific domestic context • Evidence that people are embracing the new orthodoxy of live longer work longer is scant: the factors affecting retirement timing will not be changed quickly
  25. 25. We need to situate older workers in complex temporal environments: Health Motivation, Family and capabilities, skills friends Nature of work Policy context Organisational context
  26. 26. References • Hedges, A. Sykes, W. and Groom, C. (2009) Extending Working Life: Changing the Culture DWP Research Report No. 557, London: HMSO • Lewis, (2007) „Gender, Ageing and the „New Social Settlement‟: The Importance of Delivering a Holistic Approach to Care Policies‟ Current Sociology, 55, 271- 286. • McNair, S. (2006) „How Different is the Older Labour Market? Attitudes to Work and Retirement Among Older People in Britain‟ Social Policy and Society, 5(4):485-94. • OECD (2006) Live Longer, Work Longer, Paris: OECD. • PricewaterhouseCoopers (2010) Working Longer, living Better: A Fiscal and Social Imperative PricewaterhouseCoopers. • Reday-Mulvey, G. (2005) Working Beyond 60, Basingstoke: Palgrave Macmillan. • I. Rees Jones, M. Leontowitsch and P. Higgs (2010) “The Experience of Retirement in Second Modernity: Generational Habitus among Retired Senior Managers‟ Sociology, 44(1): 103-120. • Smeaton, D., Vegeris, S. and Shain-Dikman, M. (2009) Older Workers: Employment Preferences, Barriers and Solutions Manchester: EHRC. • S. Vickerstaff, W. Loretto, J. Billings, P. Brown, L. Mitton, T. Parkin and P. White (2008) Encouraging labour market activity among 60-64 year olds DWP RR531, London: HMSO • S. Vickerstaff (2010) „The „Unavoidable Obligation‟ of Extending Our Working Lives? Sociology Compass 4/10: 869-879.
  27. 27. Retirement in flux David Sinclair ILC-UK Twitter - #retirementperceptionThis event is kindly supported by Swiss Re
  28. 28. Retirement in fluxChanging perceptions of retirementand later lifeDavid Sinclair,Assistant Director, Policy and Communications . ILC-UK The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  29. 29. Contents History of retirement – Retirement is a relatively modern construct Where are we now – Retirement has grown to 20 years The future of retirement – Citizenship in retirement – What are our rights and responsibilities?The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  30. 30. What is retirement for?The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  31. 31. Retirement is relatively new For most of human history, most people have worked – either formally or informally – up to or close to the point of death, due simply to economic compulsion. (Generally) pensions provision precedes the emergence of ‘retirement’ as a specific and substantive period of life.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  32. 32. Year Early Developments1670s First organised pension scheme for Royal Navy officers.1880s Otto von Bismarck’s government provided the first state pension in Germany1909 Old Age Pension introduced on ‘Pensions Day’, 1 January 1909. Means-tested benefit available at age 70.1921 The budget made tax relief available for occupational pension schemes. Limits on tax relief introduced in 1947.1925 Introduction of a contributory state pension for manual workers and other low-income workers. Eligibility at 65.1946 National Insurance Act established a contributory state pension available to all. The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  33. 33. Pension system beginning to crack1978 The State Earnings-Related Pension Scheme (SERPS) was introduced to provide a ‘top up’ to the state pension.1980 Abolishment of the ‘earnings link’1990s Scandals in management of occupational pensions let to new regulations2000s The closure of ‘defined benefit’ occupational pension schemes accelerated,2002 SERPS replaced with State Second Pension2003 Introduction of Pension Credit The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  34. 34. Retirement todayBetween 1881 and 2008 the economic activity rates of UK men aged 65+ fell from 74 per cent to 10 per cent. The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  35. 35. Retirement today The average retirement age for men is 64.5 years, and for women 62.4 years (ONS) Vast majority of people can expect to live for at least twenty years in retirement Today’s pensioners benefit from a level of support from the state not available to previous generations – http://www.flickr.com/photos/luc/6800884507/sizes/z/in/photo stream/ with many in receipt also of generous ‘defined benefit’ pensions from their employers.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  36. 36. Where are we now – The happy side Recent upwards trend in effective retirement ages Staying in work for longer has a positive well-being effect for many people Improved health in later life means we have more opportunities to enjoy leisure pursuitsThe International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  37. 37. But it’s not all positive Faltering growth and the end of generous pension provision, may create a compulsion to work for longer Employment opportunities for older people appear to be concentrated in low-quality positions Hierarchical workplace structures may have flattened, but older workers complain of their particular skills and experiences not being utilised and training not being offered. ‘Age-blindness’, a result of our success in challenging discrimination, is a positive development, but not if it disables employers from offering age-appropriate support to their older employeesThe International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  38. 38. An era of reform2005 The Turner Commission: Work longer, poorer pensioners or pay more. Proposals: Reduce ‘qualifying years’ for a full basic state pension to 30; the introduction of ‘personal accounts’; increase in the SPA to 68 by 20462010 The government accelerated the increase in state pension age. It will reach 66 by 2020. In 2011, the government announced plans to increase state pension to 67 by 2028, almost a decade sooner than Turner.2011 The coalition government announced plans for a single- tier state pension, abolishing the State Second Pension and set at a level higher than Pension Credit guarantee payments. Eligibility is likely to be based on residency rather than contribution records. The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  39. 39. Challenges ahead The increasing fiscal burden of an ageing society & the possibility of intergenerational conflict as today’s taxpayers are asked to fund the retirement of today’s retirees. Uncertainty over the nature and scale of social care funding Persistent disparity in life expectancy. The problem of isolation in ‘very old age’ due to the breakdown of traditional families and neighbourhoods. Mobility and mental health problems associated with ‘very old age’. The disruptive nature of technological development. The individualisation of the pensions system.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  40. 40. Citizenship in retirement Citizenship implies that, in return for recognising our duties such as obeying the law and paying taxes, we have certain entitlements.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  41. 41. Citizenship and pensions UK pensions system has moved away from the notion of citizenship, and towards individualised provision BUT - Citizen’s Pension is an http://www.flickr.com/photos/nickatkins/5888232320/ attempt to overcome the complexity in the relationship between citizenship and retirement, while establishing a solid, universal state pension as the basis for private savingThe International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  42. 42. We have designed much of our public policy concerning older people according to an image of life after 65 that is now redundant. The old notion that after this milestone in your life, all you can expect is decline and dependence is hopelessly outdated. We must assume that older people will participate actively in society and in the workplace for longer and to the best of their ability.But the principal responsibility for retirement saving must rest with the individual and not the state. The state can help support a culture of saving through fiscal measures and by ensuring the social security pension rewards rather than penalises savings. A more generous state pension with relaxed contribution rules that ensure more women receive an adequate income can help lay a solid foundation for the pension reforms that are due to begin next year. John Hutton 13th Feb 2012 The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  43. 43. What should we expect to contribute?What kind of contributions should people be making in return for this support, beyond paying taxes and, presumably, National Insurance contributions during their working life? http://www.flickr.com/photos/sammers05/3692360687/sizes/m/ in/photostream/ The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  44. 44. Rights and responsibilities: EmploymentOlder citizens have a responsibility to remain in the labour market, where possible, to enable skills retention and minimise fiscal burdens on taxpayers.Older people should have a right to support from employers, http://www.flickr.com/photos/kheelcenter/5279905182/sizes/m/in/photos tream/ and society more generally, to enable longer working lives.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  45. 45. Rights and responsibilities: Employment 46 % would consider delaying retirement if their employer offered support for reducing their hours, or working more flexibly. 41% of men and 39% of women would consider delaying their retirement if they could defer their state pension entitlement in return for higher payments later. 43% of men and 41% of women would consider retiring later if they could combine income from their existing employer and an occupational pension. Only 2% of men and 3% of women said that nothing would make them consider delaying retirement.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  46. 46. Rights and responsibilities: Volunteering The idea of an obligation to volunteer is contradictory. Many older people are eager to volunteer in later life as part of an active retirement. Opportunities to volunteer must therefore be appropriate: flexible, fun, and oriented towards utilising the skills older people have developed during their working life.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  47. 47. More time for volunteering? 73 per cent of EU residents do not undertake any formal voluntary work. Half report they would volunteer if they had the time. 72.8 per cent of working-age people plan to volunteer more in retirement Fewer than a third (+55) report that they would volunteer more if they had more time.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  48. 48. Rights and responsibilities: Housing andcare Older people should have a right to remain in their own home. It is vital for the well-being of many older care recipients But it is fair that older people draw upon property wealth to help fund http://www.flickr.com/photos/thousandshipz/4 679235/sizes/m/in/photostream/ care costsThe International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  49. 49. Citizenship at end of life Do older citizens, in an ageing society, have a right to have their lives prolonged for as long as possible through intrusive medical interventions – potentially at the expense of treatments for people in http://www.flickr.com/photos/pentaxeric/3702092530/ sizes/o/in/photostream/ ill-health earlier in the life-course? There is no easy solution but the emphasis, we argue, should be on improving rather than prolonging life.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  50. 50. Conclusions Over 20 years we have gone from crisis to crisis, slowly recognising that longevity means we cant fund the support in old age which we expect. http://www.flickr.com/photos/dulcielee/6 The crisis in care funding is emblematic 228005365/sizes/m/in/photostream/ of the fact that the scale and design of formal welfare and support services for older people has not kept pace with increasing longevity.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  51. 51.  There is a role for Government. We need national “retirement” strategies/policy incorporating all Government activities, not just DWP. We must all difficult questions – “what is the point of retirement?” – What are the rights and responsibilities for old age? – Can we debate rights and responsibilities across the life-course? We must better recognise that retirement is a http://www.flickr.com/photos/jamelah/16144383/siz process rather than an event. es/m/in/photostream/The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  52. 52. And we must move quicker on gradualretirement ‘gradual retirement’ should provide a potential solution to the challenges facing retirement. The financial incentive structure must also be geared towards encouraging gradual retirement. Employers must create and support opportunities for gradual retirement.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  53. 53.  We need to abandon the notion that people make contributions in their working life in return for support in retirement, that is, that retirement marks the point where older people’s contributions are no longer necessary or valuable. Continuing as a productive member of society in retirement is both a responsibility and a right. We should expect older people to contribute to society in return for support in retirement – but equally, many older people are eager to contribute to society, and we need to ensure opportunities to make meaningful contributions are available.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  54. 54. Better LifeI am Richard and I am perfectly able-bodied thank you and also of perfectly sound mind. What can I do for you?The chances are I know more than you about most things. I landed on Gold Beach on D-Day then worked as a brewer.It was a useful life. Defending the realm, than making beer.Now I am waiting for my telephone to ring. It never does ring.Sir Andrew Motion (for the JRF) The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  55. 55. Older Workers - trailer 1948The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  56. 56. Many thanksDavid SinclairHead of Policy and ResearchInternational Longevity CentreDavid.sinclair@ilcuk.org.uk02073400440Twitter: @ilcuk and @sinclairda The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  57. 57. Changing the perceptions of Retirement Stephen Balchin DWP Twitter - #retirementperception This event is kindly supported by Swiss Re
  58. 58. Changing Perceptions of RetirementStephen BalchinRedefining Retirement DivisionDepartment for Work and PensionsStephen.balchin@dwp.gsi.gov.uk
  59. 59. We‟re Living Longer Healthier LivesLife Expectancy, and Healthy Life Expectancy at 65, ONS 25 20 15 10 5 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Female life expectancy Male life expectancy Female healthy life expectancy, new basis Male healthy life expectancy, new basis Female healthy life expectancy, old basis Male healthy life expectancy, old basis
  60. 60. 1 in 4 children bornAnd life expectancy has been on the today can expect to live to 100increase since 1900 Cohort life expectancy at 65 (England and Wales) 1848 to 2060 – Years 30 Welfare state introduced 25 State pension introduced 20 In 1900 a 65 year old would have Lloyd George about 11 years of 15 pension life remaining, barely changed from 1850, by 10 2000 this had risen to about 20 and is forecast to 5 reach about 26 by 2050 0 1848 1861 1874 1887 1900 1913 1926 1939 1952 1965 1978 1991 2004 2017 2030 2043 2056 Male Female Source: ONS
  61. 61. So why does it sound like there’s a problem?
  62. 62. Problem 1: Our conception of „old age‟ is out of date• We base assessment of likely health on our parents and grandparents• We have an – arbitrary - boundary of 60 or 65 as when we should retire• State Pension Age is by far the strongest anchor to when we expect to retire Source: What can we learn from Retirement Expectation Data, IFS
  63. 63. Problem 2: Baby boomers mean we haven‟t had to thinkabout this too much Roughly 2 Old Age Dependency Ratio ‘working age’ to 1 over 65 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% Roughly 4 ‘working age’ to 10% 10% 1 over 65 0% 0% 1941 1951 1961 1971 1981 1991 2001 2011 2021 2031 2041 2051 With baby boom With no baby boom
  64. 64. So despite longer lives we‟ve managed to work for less Male average age of exit from labour force Percentage of adult life spent in retirement 1950 67.2 35 30 1960 66.2 25 1970 65.4 20 1980 64.6 15 1990 63.5 10 1995 63.1 5 2000 63.3 0 1950 1960 1970 1980 1990 1995 2000 2004 2004 63.8
  65. 65. Problem 3: The „deal‟ with the state, and with wider familynetworks continues to change• Over the last 50 years state has taken more then less responsibility for earnings replacement as part of the pensions system.• Family provides less care provision• New social networks are rarely based on who lives next door.
  66. 66. Problem 4: We‟re not very good at planning• Inertia – don‟t do now what you can put off to tomorrow• We‟d prefer to have things – holidays, new TV, new car - now• People avoid complexity and choose things they understand• We‟re poor at understanding risk Employees in a 401(k) pension scheme with and without automatic enrolment 100% 80% 60% 40% 20% 0% 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 Tenure (months) No automatic enrolment Automatic enrolment
  67. 67. And bad at planning impacts on more than finances,Are you planning to stay healthy into old age? • …contradicts the common observation that muscle mass and strength decline as a function of aging alone. • … declines may signal the effect of chronic disuse rather than muscle aging. • … maintenance of muscle mass and strength may decrease or eliminate the falls, functional decline, and loss of independence that are commonly seen in aging adults. Many caveats Chronic Exercise Preserves Lean Muscle Mass in Masters Athletes Andrew P. Wroblewski, MBS, BS; Francesca Amati, MD, PhD; Mark A. Smiley, MBA, BS; Bret Goodpaster, PhD; and Vonda Wright, MD, MS
  68. 68. Problem 5: changing health needsBetter medicine means: • People survive with conditions which we‟re previously fatal. • We can continue to function with conditions that used to be debilitating.Better technology also means there‟s more treatments out there – so more of achallenge to prioritise.
  69. 69. Some things are already changing: work and pensions Average Age of Leaving the Labour Market • People are working longer65 Men • The Default Retirement Age is64 Women gone • State Pension Age increasing63 • Private Pension provision is62 heading to a world with many more Defined Contribution61 benefits and less Final Salary schemes.60 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 • Auto-enrolment into occupational pensions starts this year
  70. 70. But what next?Could be..Employers:• More 50 year olds doing apprenticeships• Flexible working, and movement between types of jobs• Different approaches to sharing expertise(Big) society:• Care banks• Local networks• Intergenerational work (volunteering in schools)Individuals:• Individuals challenging assumptions that age should be important• More responsibility or opportunity for the life they want
  71. 71. Changing the perception of retirement Daniel Ryan Swiss Re Twitter - #retirementperception This event is kindly supported by Swiss Re
  72. 72. Changing the perception ofretirementDaniel RyanHead Research & Development, Life & Health1 March 2012
  73. 73. Global ageing populationsShared perils and promisesDaniel Ryan | Changing the perception of retirement | 1 March 2012 73
  74. 74. Rapid growth expected for the oldest old Source: Department of Work & Pensions, 2011Daniel Ryan | Changing the perception of retirement | 1 March 2012 74
  75. 75. Trends in pensionable ages Source: Pensions at a glance 2011, OECDDaniel Ryan | Changing the perception of retirement | 1 March 2012 75
  76. 76. Retirement villages York, UK Source: Hartrigg Oaks, Joseph Rowntree FoundationDaniel Ryan | Changing the perception of retirement | 1 March 2012 76
  77. 77. Retirement villages Perth, Australia Source: Ocean Gardens Retirement Village, Perth, Australia. www..oceangardens.com.au and iStockphoto/Georgy MarkovDaniel Ryan | Changing the perception of retirement | 1 March 2012 77
  78. 78. But we are not saving enough for this long retirementThe average annual amount individuals would have to save in order to achieve aretirement income of 70% of salary (selected countries), EUR14 00012 00010 0008 0006 0004 0002 000 0 United Germany Ireland France Spain Czech Poland Italy Turkey Hungary Kingdom Republic Source: Aviva, 2010Daniel Ryan | Changing the perception of retirement | 1 March 2012 78
  79. 79. Italy: The Manzo family of Sicily Food expenditure for one week: 214.36 Euros or $260.11Daniel Ryan | Changing the perception of retirement | 1 March 2012 79
  80. 80. Germany: The Melander family of Bargteheide Food expenditure for one week: 375.39 Euros or $500.07Daniel Ryan | Changing the perception of retirement | 1 March 2012 80
  81. 81. United States: The Revis family of North Carolina Food expenditure for one week $341.98Daniel Ryan | Changing the perception of retirement | 1 March 2012 81
  82. 82. Obesity trends in US adults1990 Source: CDC No Data <10% 10%–14% 15%–19% 20%–24% ≥25% Daniel Ryan | Changing the perception of retirement | 1 March 2012 82
  83. 83. Obesity trends in US adults2000 Source: CDC No Data <10% 10%–14% 15%–19% 20%–24% ≥25% Daniel Ryan | Changing the perception of retirement | 1 March 2012 83
  84. 84. Obesity trends in US adults2010 Source: CDC No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30% Daniel Ryan | Changing the perception of retirement | 1 March 2012 84
  85. 85. Old age eroding our physical capabilities  Hand grip strength reduces by 45% by age 75  Blood flow to brain reduces by 15-20% by age 70  Sense of smell reduces to 50% of peak by age 80  Maximum heart rate reduces by 15-20% by age 70  Blood pressure of 50% population at age 65 is mild or worse hypertension  Maximum breath capacity reduces by 40% by age 80  Dementia affects 10% of those over age 65; 20% of those over age 85 Daniel Ryan | Changing the perception of retirement | 1 March 2012 85© 2010 The Actuarial Profession  www.actuaries.org.uk
  86. 86. Understanding the challenges of old age Source: The Koken Aged Simulation SetDaniel Ryan | Changing the perception of retirement | 1 March 2012 86
  87. 87. Longer lives – implications for healthcare Survivors and deceased in regional study in Italy Source: AHEAD, European Network of Economic Policy Research Institutes (2007) Daniel Ryan | Changing the perception of retirement | 1 March 2012 87© 2010 The Actuarial Profession  www.actuaries.org.uk
  88. 88. Teaching Geriatric in Medical Education study  Collaborative study of WHO and International Federation of Medical Students Associations  WHO intends healthy/active ageing and promotion of long term health to form education of all future young doctors  Promotion of life course in graduate training and later  41% of medical school curricula refer explicitly to geriatrics  GERIND index calculated by medical school and averaged across country –separation of geriatrics teaching and quality of ageing science being taught  Central hypothesis is that countries with higher percentage of older persons are more likely to have separate high-quality teaching on geriatric medicine – not always true Daniel Ryan | Changing the perception of retirement | 1 March 2012 88© 2010 The Actuarial Profession  www.actuaries.org.uk
  89. 89. TeGeMe – GERIND index vs. age of populationSource: World Health OrganisationDaniel Ryan | Changing the perception of retirement | 1 March 2012 89
  90. 90. Putting individuals at the centre of healthcare Health systems must evolve in response to the ageing of society to optimise health across the full life course Greater emphasis on prevention and public health Moving from hospital, acute care and institutional care to community-based care Shared responsibilities increase effectiveness and efficiency: individuals to be partners in own care A co-ordinated continuum of care centred on patient, often with multiple diseases Our target must be compression rather than expansion of morbidity Source: WEF 2012: Global Aging: Peril or Promise?Daniel Ryan | Changing the perception of retirement | 1 March 2012 90
  91. 91. A final word of thanksto our sponsors in retirementDaniel Ryan | Changing the perception of retirement | 1 March 2012 91
  92. 92. Thank you
  93. 93. Legal notice©2012 Swiss Re. All rights reserved. You are not permitted to create anymodifications or derivatives of this presentation or to use it for commercial orother public purposes without the prior written permission of Swiss Re.Although all the information used was taken from reliable sources, Swiss Redoes not accept any responsibility for the accuracy or comprehensiveness ofthe details given. All liability for the accuracy and completeness thereof or forany damage resulting from the use of the information contained in thispresentation is expressly excluded. Under no circumstances shall Swiss Reor its Group companies be liable for any financial and/or consequential lossrelating to this presentation.Daniel Ryan | Changing the perception of retirement | 1 March 2012 93
  94. 94. Changing the Perception of Retirement 1 March2012 Twitter - #retirementperceptionThis event is kindly supported by Swiss Re

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