The surprisingly large policy implications of changing retirement durations

However, the factor that will likely make the most difference in determining whether retirement savings are adequate (i.e., the number of years spent in work and contributing to a pension versus the number of years retired and receiving a pension) has not reached the policy table. [...] However since the mid-1990s, there has been a clear decline in the proportion of the ‘retired’ population in all of these age groups – although with a blip up in the most recent period among in the 55-59 group, reflecting the recent economic downturn. [...] In order to illustrate the effects an extension of working life of this magnitude, we developed a simple estimate that assumes that, by 2031, people in older age groups (over age 55) have the same employment rates as did those in the preceding 5 year age grouping in 2009: • For example, it assumes that the percentage of people in the age group 55 to 54 in 2031 was the same as in the age group 50-5 [...] Although we are not using statistics on average retirement ages in our analysis for reasons discussed in the last section, these averages are useful in illustrating the magnitude of the effects of the assumed changes in employment rates. [...] If we continue to use the average age of retirement in 2031 these 2009 employment rates, by 2031 the would be 69.1 – up by 6.2 years from average age of retirement would be 64.9, 2009, as a consequence of the changes in up by 2 years as a consequence of the both the age structure and the higher aging of the population between now and employment rates.