Putting off retirement is good for the economy. And people will be happier, healthier and wealthier too
When we first introduced a general state pension a little over a century ago, you had to be aged 70 to claim it. Life expectancy back then was barely 50. An equivalent policy now — with people typically living into their mid-eighties — would be for the state pension to kick in only after you have celebrated your 100th birthday. If the norm in modern Britain continues to be that people enter the labour market at about the age of 21 and retire on their 65th birthday, more and more people will spend less than half their lives in gainful employment.
The IEA’s research paper Work Longer, Live Healthier paints a startling picture of the many benefits of staying in work. The research takes into account confounding factors such as if someone retires from work because they are ill, one wouldn’t want to conclude that it was their retirement that rendered them ill. Its surprising conclusion is that retirement has very measurable downsides — and that the longer you spend in retirement the greater these are.
Retired people are about 40 per cent less likely to describe themselves as being in excellent or very good health compared with people who remain in work. The chance of having a diagnosed physical condition and of requiring medication to treat it both increase by 60 per cent. The probability of clinical depression is 40 per cent greater.
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