A ground-breaking new study has found that retirement has a detrimental impact on both mental and physical health over time. Although initially there may be a small bounce in health, over the medium-longer term retirement causes a drastic decline in health. This is the case for both men and women.
These findings are especially significant given the demographic changes in the UK and the financial pressure this is placing both on state pensions and health care costs.
This is clear evidence that the government should pursue policies that remove barriers to working longer. Higher state pension ages are both possible and desirable and should lead to better average health in old age. Impediments to later retirement such as those found in state pension systems, disability benefit provision and employment protection legislation should be removed.
Work Longer, Live Healthier: The relationship between economic activity, health and government policy, published by the Institute of Economic Affairs and the Age Endeavour Fellowship, isolates for possible confounding factors and shows that:
- Retirement decreases the likelihood of being in ‘very good’ or ‘excellent’ self-assessed health by about 40%.
- Retirement increases the probability of suffering from clinical depression by about 40%.
- Retirement increases the probability of having at least one diagnosed physical condition by about 60%.
- Retirement increases the probability of taking a drug for such a condition by about 60%.
The length of time spent in retirement is also significant. The results for doubling the number of years spent in retirement are as follows:
- It decreases the likelihood of being in ‘very good’ or ‘excellent’ self-assessed health by between 10% and 30%.
- It increases the probability of suffering from clinical depression by 17%.
- It increases the probability of having at least one diagnosed physical condition by 22%.
- It increases the probability of taking a drug for such a condition by 19%.
Commenting on the report, Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, said:
“Over several decades, governments have failed to deal with the ‘demographic time bomb’. There is now general agreement that state pension ages should be raised. The government should take firmer action here and also deregulate labour markets. Working longer will not only be an economic necessity, it also helps people to live healthier lives.”
Commenting on the report, Edward Datnow, Chairman of the Age Endeavour Fellowship, said:
"In highlighting the positive link between work and health in old age this research is a wake-up call for the UK's extensive and well-funded retirement lobbies. More emphasis needs to be given to ways of enabling a work-life balance beyond today's normal retirement age with legislative discouragements to extending working life being replaced with incentives. There should be no 'normal' retirement age in future. More employers need to consider how they will capitalise on Britain's untapped grey potential and those seeking to retire should think very hard about whether it is their best option."
Notes to editors
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer on 020 7799 8909 or 07766 221 268.
The full report, Work Longer, Live Healthier: The relationship between economic activity, health and government policy  by Gabriel Sahlgren, can be downloaded here . 
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
Since it was formed during the Great Depression, Age Endeavour Fellowship (operating under various titles) has been concerned with the dignity of work and its benefits to physical and mental health and to general welfare and prosperity: latterly it has focused on the older age groups and will continue to do so.
The IEA is a registered educational charity and independent of all political parties.