Poor pension coverage postponing retirement
Nearly half of the world’s older persons are not receiving a pension, which could account for the trend seeing people take retirement later in life.
A new International Labor Organization (ILO) report reviewing 178 countries worldwide showed that 48% of all people over pensionable age do not receive a pension. Furthermore, a large proportion of the 52% of people receiving pensions do not benefit from adequate coverage.
The resulting lack of income security means that many older men and women must now work for as long as they can, and are thus putting off their retirement period.
This new trend has recently been highlighted in the United Kingdom (UK). A study by UK company Saga found that 55% of British workers over the age of 50 have changed their retirement plans to work later in the last five years, while 44% currently don’t know when they will be able to retire fully.
The number of British workers over 50 now stands at just over 9m, a significant increase of nearly 1m since 2010. Saga attributes this in part to the government’s abolition of the default retirement age in 2011.
The UK is also raising the age at which workers qualify for the state pension, in common with other leading economies with aging populations, including the US and Germany.
Our author René Böheim has written about the impact of later retirement on youth employment. He argues that, contrary to popular concerns, higher employment for older workers coincides with higher employment for younger workers, and that an increased retirement age actually increases younger workers’ wages.
Today marks the UN International Day of Older Persons, whose theme this year is “Leaving no one behind: promoting a society for all.”
Read more here.
Related articles:
The effect of early retirement schemes on youth employment, by René Böheim
Redesigning pension systems, by Marek Góra
The incentive effects of minimum pensions, by Sergi Jiménez-Martín