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that the case for older workers becomes
overwhelming. PwC has created a
GoldenAge Index, which tracks how
well developed countries are doing in
harnessing the potential of older workers.
The UK is currently 19th out of 34, with
Sweden, the EU’s best performer, in third8.
If the UK could match Sweden, PwC
estimates that it would boost annual GDP
by £100 million.And this wouldn’t be
blocking the progress of younger workers,
but adding to total employment.
Demographics nowmake keeping
people at work an economic necessity,
rather than merely attractive, and Baroness
Altmann urges companies to‘retain,
retrain and recruit’many more older
her
report notes,
over the next few
years there will be
3.7 million more
people aged between
50 and State Pension
age, but 700,000
fewer people aged
16 to 499.
‘This net shortfall of workers cannot be
filled by immigration of 200,000 a year,’
the report points out.‘With our ageing
population, businesses urgently need to
recognise the demographic inevitability.
Either more over-50s will work longer, or
we face declining economic growth.’
Balance sheetAn ageing workforce needn’t be a
negative. Older workers mean lower staff turnover,
increased customer satisfaction and a skills legacy.
1 , August 2015
2 , May 2016
3 , May 2016
4, 5, 9 May 2016
6
7 , May 2016
8 PwC Golden Age Index, June 2015
Getty Images
ANALYSIS
THE INVESTOR | 17
IN THE WORKPLACE
There are more older people
working today than ever.
The latest government
figures show that some 9.4
million people aged 50 and
over are now in work,making up 30% of
the workforce1 (8.2 million between 50
and 64, plus 1.2 million 65 and over2).
The over-65s are generally still working
for one of two reasons: either they don’t
want to retire, or they can’t afford to. In a
recent study3 of over-50s in the workplace,
Aviva discovered that more than one in
three now expect to retire at a later date
than they expected when they were
average, they expect to retire eight years
later than they originally thought.
For nearly half of them (46%), it is
because they haven’t saved enough into
their pension. But 21% said they would
work longer because they still had a lot to
offer, while 20% pointed to the enjoyment
that work provides.
One reason for extended careers is
that we are living longer and 65 is not
the great age it might have once seemed.
Government policy is also intent on
prolonging working lives.The default
retirement age has been abolished, so that
staff can’t be forcibly ejected the moment
they reach 65, while State Pension ages are
being pushed back.
In a special report for the government
called A NewVision for OlderWorkers4,
Dr Ros (now Baroness)Altmann outlined
some of the pluses of retaining older staff.
Research, she pointed out, suggests that
the majority of older workers are just as
productive as younger staff, at least until
the age of 705. Companies that employ
them hold a body of experience that just
isn’t available elsewhere.
Keeping older employees also reduces
skill shortages and, because they are less
likely to leave, lowers staff turnover.Older
customers appreciate dealing with their
counterparts and customer satisfaction
drives higher profits.Across the board,
they tend to improve staff morale.
DIY chain B&Q has a long record of
employing older people. In a 1989 pilot
project, its Macclesfield store was staffed
by people over 50 for six months. Profits
increased by 18%, while staff turnover
fell by 80% 6. It scrapped its mandatory
retirement age a few years later.
‘Having a diverse workforce works
for our customers,’ says Fraser Longden,
People Director at B&Q.‘The older
workers employed in our stores have
greater life experience and a willingness to
work, which means
they can pass on their
knowledge and
skills to customers
and younger
members of staff 7.’
Other UK
companies that now
make a virtue out
of employing older
staff include Barclays, BG (formerly
British Gas), JDWetherspoon and
National Express.
If this works for companies, it works for
people too. It’s possible to put off claiming
State Pension, resulting in larger pension
payments later; others will continue to
work while drawing their pension. Either
way, they no longer have to make National
Insurance contributions after 65.
Research commissioned for theAltmann
report came up with similar results to the
Aviva study.Many liked the idea of retiring
gradually rather than abruptly,while more
than one in five retirees said they wished
they had worked longer.
What about the economy? It’s here
Either more over-50s
will work longer, or we
face declining economic
growth