Older women could be more likely to be in jobs than men, says report

Older women will be as likely or more likely to be in jobs than men by the 2020s, according to a report by the Institute for Fiscal Studies.

Older women will be as likely or more likely to be in jobs than men by the 2020s, according to a report by the Institute for Fiscal Studies.

The Changing Face of Retirement, a new  report published today by the IFS, projects the demographic and financial circumstances of those aged 65 and over in England up to 2022–23.

Over the decade from 2012 to 2022 the population aged 65 and over is projected to increase by 22% (from 17% to 20% of the overall population). 

It says tomorrow’s older population will also not look like today’s. It highlights:

– increasing life expectancy, plus the fact that mortality rates are lower for those in couples, means that far fewer pensioners will be living alone in the future. We project that 38% of people aged 85 and over will live in couples in 2022–23, up from 25% in 2010–11.

– that the health of older women is improving. Within each age group the proportion of women with no substantial health problems is projected to rise by more than 5 percentage points: for example among those aged 65 to 74 it is projected to increase from 39% to 47%.

– Employment rates for women in their late 60s, already at their highest level for forty years, are set to increase faster and approach or even overtake men’s in the early 2020s. The IFS projects that 37% of women aged 65 to 69 will be in paid work in 2020–21, compared to 16% in 2010 – and just 8% in 2000. Meanwhile, it predicts male employment rates for this age group will rise from 29% to 33%.

It says: "The projected increase in employment rates of older women is driven by improvements in health and, in particular, the rise in the female state pension age from 60 in 2010 to 66 in 2020. The additional female workers are drawn predominantly from women in good health."

– that over the 2000s, the incomes of those aged 65 and over rose by 2.8% per year on average (faster than for younger individuals), as state pensions and  benefits and private pensions grew rapidly. It projects that the incomes of this group will grow slowly between 2010–11 and 2014–15, before recovering to grow by 2.0% per year over the period from 2014–15 to 2022–23. This growth will be driven more by increased earnings and private pensions than by state pensions and benefits, it says. It predicts the net incomes of 65 to 74 year olds will grow by 3% per year on average between 2014–15 and 2022–23, boosted by higher gross earnings. Net income among those aged 75 and over will only grow half as fast, at 1.6% per year, it says.

Between 2010–11 and 2022–23, gross earnings are projected to grow by an average of 8% per year among those aged 65 to 74. Gross private pension income for this group is projected to grow at 5% per year – faster than projected growth for older age groups (a reversal of trends seen in
the previous decade).

– that incomes for the poorest pensioners will grow by about 1% per year in real terms, assuming their state pensions and benefits rise as currently planned. As both earnings and private pensions are forecast to grow faster than this, income inequality among those aged 65 and over is projected to grow.

– the fall of ‘absolute’ income poverty for those aged 65 and over, from 20.1% in 2014–15 to 12.7% in 2022–23, around a third of its 2000–01 level. It says this is driven by real income growth of 2.0% per year over that period. It says: "As income poverty among those in couples is projected to fall faster, poverty among the over 65s will become increasingly concentrated among single women."

Katy Heald, a senior researcher at the IFS and an author of the report, said  “Employment rates for women in their late 60s will increase further and faster over the next few years, approaching or even overtaking those among men of the same age. This reflects improving health, as well as being a  response to the rising state pension age. Of course while increasing earnings  will boost the incomes of these women, longer working lives will not necessarily leave them better off in a broader sense.”

Picture credit: stockimages and www.freedigitalphotos.net.

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