Older workers are on a roll. Are you ready?

The number of older UK workers is rising fast. Eddie Elias-Kean, Group Protection Account Manager at Aviva examines how and why they are fast becoming a permanent part of the 21st century workplace. 

Older UK workers are in the headlines, from high earners to those on more modest incomes. At the top end of the scale, the Rolling Stones – now in their 70s – are bringing their “No Filter” stadium tour to the United States, sponsored by The Alliance for Lifetime Income, an organisation which publicises annuities (1). Although retirement planning might seem a long way from classic hits like ‘Jumpin’ Jack Flash’ and ‘Start Me Up’, the band’s previous 28 shows grossed close to a quarter of a billion US dollars in ticket sales (2), proving that six decades on, these active septuagenarians possess substantial expertise in income generation.   

Mick Jagger

More modest means
At the more modest end of the income spectrum, older workers are becoming a bigger part of the UK’s workforce. This demographic shift was evident in the 2011 Census
(3), which noted that the proportion of those aged 65-74 who were economically active in 2011 (16 per cent) was almost double that in 2001 (8.7 per cent), a significant change which shows few signs of slowing down. The latest figures (4) show that between October to December 2017 and the same period in 2018, the number of people aged 65 and over in the UK workforce market increased by 106,000, more than enough to fill Wembley Stadium. And over that period, the over-65s accounted for roughly one in four of all 444,000 ‘new’ workers.  

However, there are underlying economic reasons why there are more older workers: state pension issues; the decline in defined benefit (DB) pensions; and the UK’s buoyant services-based employment market. 

Factors for working longer
Let’s take the state pension first. When it was introduced in 1948, life expectancy ensured that a 65-year-old man could count on it to pay out for 13.5 years. By 2017, a 65-year-old could expect to live for another 22.8 years. By next year, the state pension age will be 66 years for both men and women. But bear in mind that when many women originally joined the workforce, a woman’s retirement age was 60. For some women, this means working for an extra seven years, because the state pension age is set to increase to 67 for both men and women between 2026 and 2028 (5). And the simple fact is that many people cannot afford to retire on the basic state pension, which under pre-2016 rules, is only £129.20 a week from April 2019 (6).

The decline in generous DB pension schemes could be another factor.  The most recent figures show that are only 5450 of these ‘gold plated’ pension schemes are left in the private sector, and of these 41 per cent of these are closed to new benefit accruals (7). 

Finally, there is simply more employment out there that older workers feel comfortable with. When these individuals started their working lives, the UK’s steelworks, mines and other heavy industries had yet to be replaced by today’s services-driven economy, in which it has become physically easier for people to work for longer. Next, factor-in the news that the UK economy continues to create jobs faster than people can fill them. The latest ONS statistics bear this out (4), recording an estimated 32.6 million people in work, while the unemployment rate –  at 4 per cent

   is the lowest it’s been since 1974. And if you’ve tried to find a bricklayer recently, you’ll understand.

Private pension industry 
So those are some of the key reasons for the growing numbers of older workers in the UK economy. What does this huge demographic shift mean for the private pensions industry and group protection providers? 

The flexibility provided by 2015’s pension reforms certainly helps those in defined contribution (DC) schemes who wish to balance an early retirement (from age 55) with work, which isn’t the case with DB schemes where retirement ages are often set in stone and an early departure can mean financial penalties. And for those over 65, their earned income has ten more years of tax relief available for pension contributions. 

Private pensions provided by insurers certainly win out on flexibility, offering huge scope for older workers. But that’s only one area to consider, because older workers will still require financial protection from an illness, disablement or an early death. Although group protection policies traditionally cater for large numbers of younger, middle-aged and pre-retirement aged employees, older workers can also be accommodated. However, the issue here is that the major products have age limits, as you’d expect. At Aviva, it’s 70 years for group income protection and for group critical illness cover.  For group life cover, it’s 75 years. 

Overall, the potential to provide pensions and to cover some of the protection needs of older employees is in place. However, there are other important issues to consider, particularly with what is known as the ‘ceasing age’ on protection policies. Older workers cost more to insure, it’s as simple as that. And it’s essential that employers are fully conversant with age discrimination law when setting-up workplace benefits and cut-off ages. 

Retaining skills 
In addition to the pensions and insurance industry, the Prince of Wales’ respected ‘Business in the Community’ organisation recently put the spotlight on issues faced by older workers, with the over-50s as its key focus. The organisation noted that by next year, one in three workers will be over 50. Aviva UK Insurance’s CEO Andy Briggs who is also Business in the Community's Age Leadership Team Chair helps lead the conversation about why companies should recognise the benefits of a multi-generational workforce: “It ensures that we do not lose the valuable skills and talents of older workers while maintaining a workforce that represents diverse customers. A key hurdle is dispelling myths and changing mindsets. At Aviva we have provided training for line managers on the importance of having career conversations with people of all ages; as well as sharing statistics to challenge the assumption that older workers are less productive or engaged.”(8)                 

To sum up, the numbers show that – for many different reasons – working for older people is an attractive and, in some cases, necessary option. Whatever the definition applied to an ‘older worker’ – 65 or 50 –  these people are fast becoming an essential part of the UK’s diverse 32.6 million-strong workforce. The pensions and insurance sector has risen to the challenge and will aim to lead the way forward in this area. From high-earning entertainment icons to the lower paid, the added value of older and mature workers can offer a huge amount of satisfaction for all concerned. 

The author is Eddie Elias-Kean, Group Protection Account Manager at Aviva.

This article is provided by Aviva. 


  1. The Alliance for Lifetime Income: sole sponsor of the Rolling Stones 2019 “No Filter” U.S. tour 
  2. Billboard: The Rolling Stones Wrap “No Filter” Tour With $237.8m earned 
  3. 2011 Census 2011 Census (England and Wales) 
  4. Office for National Statistics (February 2019)
  5. Gov.UK life expectancy statistics 
  6. Pension and benefit rates 2019/2020 
  7. Pension Protection Fund ‘Purple Book’ 2018
  8. Business in the Community January 2019  

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