Your retirement is shrinking as government act to delay the time workers leave the workforce, says a new think-tank report.
Moving retirement dates is one of the only ways governments can reduce the number of older workers who are not earning a salary or paying tax, says the Organisation of Economic and Cultural Development (OECD).
The report Working Better With Age forecasts that current retirement patterns will lead to the number of retired people needing financial support will increase from 42 per 100 workers to 58 by 2050 and even more in some countries, such as Greece and Poland.
But delaying retirement could reduce this from a 40% increase to just 9%, says Stefano Scarpetta, OECD Director of Employment, Labour and Social Affairs.
Poor incentives to work
“The fact that people are living longer and in better health is an achievement to be celebrated. But rapid population ageing will require concerted policy action to promote active ageing to offset its potentially serious consequences for living standards and public finances,” he says.
The report points out that although many countries encourage workers to retire at 65 years old, the average age when older people give up working is lower than 30 years ago, despite them living longer.
“This is explained by a combination of poor incentives to continue working at an older age, employer reluctance to hire and retain older workers, and underinvestment in employability throughout working lives,” says Scarpetta.
He advocates governments should review employment law and salaries for older people to encourage working into old age.
Closing the skill gap
“Employment regulations as well as seniority wages should be reviewed and reformed where necessary to boost labour demand for older workers and discourage the use of precarious forms of employment after a certain age,” said Scarpetta.
“Greater flexibility in working time and better working conditions more generally are also needed to promote higher participation at all ages. For example, long working hours may deter some older people from working longer.
“One key factor preventing older workers from closing the skill gap with younger employees lies in the fact that the employers usually do not see the benefits of investing in the training of their older employees. Providing good opportunities for workers to upgrade their skills and learn new ones throughout their working careers is a key requirement for fostering longer working lives in good quality jobs.”