Factors affecting the labour market participation of older workers

The UK government aims to improve the position of those aged over 50 in the labour market. As part of this commitment, the Department for Work and Pensions (DWP) commissioned this survey of people aged between 50 and 69 years to identify the factors that encourage labour market participation and influence labour market withdrawal among this age group. Key research objectives were identified for separate groups of interest. For older workers in employment, the aim was to analyse the factors likely to influence the decision to retire or remain in the labour market. For those in receipt of income replacement benefits, factors that might influence people to return to some kind of employment or activity, or move more permanently into inactivity were analysed. For those people who considered themselves to be retired, the reasons for early retirement, whether they would consider working again and/or engage in voluntary activity, satisfaction with retirement and retirement income, and comparisons with pre-retirement expectations were investigated. The research also looked at factors such as financial situations, reasons why people work beyond state pension age, and barriers to economic activity. The survey found that, for many people, the current state pension age of 60 is seen as the ‘natural’ time to retire. The additional or alternative source of income available at this age increased people’s financial capacity to stop working. Evidence revealed that women have already become attuned to extending their working life beyond the current state pension age. The notion of ‘semi-retirement’ was viewed as a way of easing the transition from work to full retirement. The vast majority of people below state pension age and not working fell into four main categories, each of which have different implications for policy: (1) those who were actively seeking work; (2) those who considered themselves retired or financially secure; (3) those who were looking after home or family and had typically been away from the labour market for a long time or had never had a paid job; and (4) those who were not seeking work for health reasons.