Government champion calls for a 'retirement revolution'
A person's age shouldn't define their ability to earn or learn, said Ros Altmann as she called for social revolution when it comes to retirement.
The government's new champion for older workers suggested gap years for taking a break from, rather than ending, a career - a time during which older workers could look to retrain.
Other ideas to help tackle the shifting demographic in the UK included the suggestion that 'care robots' could be introduced, to monitor people while human carers are away from the home.
Time out to retrain and paying for course fees is just one possibility open to retirees taking advantage of the new pension flexibility that allows them to take a 25% lump sum, added pensions minister Steve Webb as the pair addressed a conference on older workers in London yesterday.
"We have to get away from the cliff edge scenario of retirement where people believe they must exit the labour market on their highest salary and consider the opportunities available to continue working and earning," she said.
She added that the government's 'guidance guarantee', which will see those approaching retirement receive financial advice about their options (as promised by the Chancellor in his March Budget and set to be outlined next week), was an opportunity to also discuss people's plans for working later.
"Retirement shouldn't be an event but a carefully managed process," she said. "We're not talking about working until you drop but work while you can, as long as you are able to and want to," she added.
She called on employers to do more to recognise the importance of older people in the workforce and the life skills they are able to bring to a job. HR managers must look beyond the CV and to the person, she added.
By 2025 there will be 3.7 million more workers aged between 50 and state pension age, while the number of workers aged 16 to 49 will fall by around 700,000.
Employers failing to take measures to address this shift will fall behind the curve, added pensions minister Steve Webb.
He said the scrapping of the default retirement age and the right to request flexible working was a major step forward in helping older people stay in the workforce for longer.
He added that, while employers are not obliged to accept requests for flexible workers, three out of five workers gets it immediately after they make a request, while another 20% get it after a subsequent discussion.
Altmann said that if over 50s worked one year longer than the current state pension age, it would contribute extra growth of 1% to the economy.
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.