UK women are retiring seven years later, on average, than they did 30 years ago, signalling “dramatic shifts” in how people approach work.
The study from longevity think tank Phoenix Insights, part of the Phoenix Group, found that both men and women now retire at an average age of 64, indicating that men are retiring three years later.
Three decades ago, there were two distinct ages when men and women chose to retire. The think tank said that this was driven almost entirely by gender differences, with women retiring on average at 56 and 10 months and men at 61 and four months.
Today, gender differences behind these behaviours have “largely disappeared”, the research said, as both men and women retire at 64 on average.
People are starting and stopping work later in life, staying in education for longer than previous generations and delaying retirement.
In 1994 around one in four (27 percent) 18-year-olds were students, but in 2024 this has increased to 48 percent.
There is also a marked difference at the other end of people’s working lives. In 1994 around three in four (73 percent) 65-year-olds were retired, compared to 39 percent in 2024.
Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: “There have been dramatic shifts in how we retire in recent decades. Thirty years ago, women typically retired in their mid-50s and men in their early 60s. Today, those gender differences have all but disappeared, with both men and women retiring on average at 64.
“State pension age increases have been the primary driver behind this, but it’s not just about changes to pension policy. Women now make up a much bigger part of the workforce and greater workplace flexibility means more people now transition to retirement gradually, staying in work for longer on reduced hours. There has also been a trend towards self-employment among the over-50s. This can give people more choice and control over their working life, but may also be due to being unable to find work with an employer.”
The surge in flexible work arrangement is the top reason people choose to stay in work longer, the study found. A third of over 50s now work part-time, and the rate of home-working in this age group has more than doubled since the pandemic, from 10 percent to 22.4 percent between 2020 and 2023.
The think tank said that flexible work patterns are “essential” for employers supporting people aged 50 plus to remain active and engaged in their careers.
In addition to flexible working, changes to the state pension age have also been a factor in people working longer. Previously the state pension age was seen as a signal for many to retire, especially for people struggling to work for longer, or without private pension savings.
However, the state pension age has increased over the past decade suggesting it may not be as strong a signal as for previous generations. Between 2010 and 2018 the state pension age increased for women from 60 to 65, becoming the same as men, and increased again between 2018 and 2020 to 66 for both men and women. A further rise, to 67, is expected in the next few years.
The research suggests the state pension age may not be as influential for future retirees who may want or need to remain in work.
People that might have previously retired are also embracing self-employment, the research found. One in five workers aged 60-64 are currently self-employed, increasing to one in three for workers over-65.
The flexibility and control self employment offers is a clear draw, particularly for older people that are unable to find work with an employer. The research highlighted that a lack of retirement savings is another driver. It found that 64 percent of self-employed workers aged 60-65 have no private pension savings.
Thomson said: “Flexible work has been a game-changer for supporting over-50s to continue to work, earn and save later in life, but we still have high rates of economic inactivity among this group. Many over-50s fall out of work early due to reasons such as caring responsibilities or ill health and find it difficult to re-enter the workforce. Being out of work prior to state pension age is a major driver of poverty, so it’s crucial we reverse this trend in the interest of individuals, businesses, and the wider economy.”
