Half a million people approaching state pension age are too ill to work

Disability and poor health are preventing nearly half a million people approaching retirement from working, a figure that will only increase as the state pension age (SPA) starts to rise, according to a TUC analysis of official labour market data published today (Friday).

The TUC research finds that the employment rates for those approaching the current SPA are low, with just 54 per cent of men aged 60-64 and 62 per cent of women aged 56-60 in work.

Ministers seem to think that putting up the state pension age will automatically increase working lives, yet the TUC argues that many older people are unfit or will find it hard to find work and so will end up in a new limbo zone – too young for a pension, and too old to work.

Nearly two in five of those approaching the SPA are economically inactive (defined as someone who has not sought work in the last four weeks), with long-term sickness and disability cited as the main reason for then not working.

People formerly working in skilled trades, heavy industry and low-skilled jobs are most likely to be inactive due to disability and ill-health, while managers and senior officials are far more likely to be inactive because of early retirement.

Nearly a hundred thousand more people are currently inactive due to long-term sickness and disability (470,325) than to taking early retirement (375,368).

Around a quarter of a million of all economically inactive older people actually want to work. But with nearly half of all unemployed older workers out of work for at least a year, it’s no wonder so many have given up looking for jobs, says the TUC.

With nearly half a million people approaching the state pension age already unable to work due to ill-health, the TUC believes the government is wrong to raise SPA without first addressing the health inequalities that are forcing many people out of work well before they’re able to draw their pension.

The TUC is also concerned that planned rises in the SPA are being accompanied by tighter controls on social security support that will force many older people to actively look for work or risk losing their benefits.

While it is vital that older unemployed workers are provided with access to high quality employment support, forcing older disabled people approaching retirement to comply with tight Jobcentre Plus requirements is a poor use of resources, the TUC warns.

Instead the TUC believes the government should focus on tackling age discrimination, extending access to flexible working and supporting those who are actively seeking work to re-enter the jobs market.

TUC General Secretary Brendan Barber said: ‘While more people are working past their state pension age, often as the only way to get a decent retirement income, a far greater number of older people are unable to work due to ill-health or because they are trapped in long-term unemployment.

‘Accelerating the rise in the state pension age will simply push more people into poverty. We will end up with a new limbo zone for people in their mid-60s who are too young for a pension, but too old to have any realistic chance of a job. With a benefits system that gets meaner and tougher each year, even 66 year olds who have worked for decades before stopping work will be treated as work-shy scroungers.

‘By raising the state pension age and ignoring persistent health inequalities, the government risks overseeing a dramatic rise in pensioner poverty.’

Economic status of people within five years of the SPA

Status Men, aged 60-64 Men, aged 60-64 (per cent) Women, aged 56-60 Women, aged 56-60 (per cent) All, under five years from SPA All, under five years from SPA (per cent)
Employed 958,065 54.4 1,110,438 61.9 2,068,503 58.2
Unemployed 74,158 4.2 51,027 2.8 125,185 3.5
Inactive 727,683 41.3 633,189 35.3 1,360,872 38.3

Reasons for economic inactivity for people within five years of the SPA

Reason for inactivity Managers, senior officials Admin and secretarial Skilled trades Sales and customer service Process, plant and machine operatives Elementary All
Looking after family/ home 4,885* 6,667* 4,817* 8,027* 7,440* 11,942 164,618
Long-term sickness/ disability 14,972 20,180 35,934 17,035 24,899 38,234 470,325
Retired 52,396 60,608 40,458 19,964 24,670 36,649 375,368

Source: Labour Force Survey, Q1 2012.

* Frequency below 10,000 means results should be treated cautiously.

– A person is described as economically inactive if they have not sought work in the last four weeks and/or is not available to start work in the next two weeks.

– Not all economically inactive individuals are recorded as having a previous occupation.

– Under the Pensions Act 2011, the SPA will rise to 66 for both men and women by October 2020, and to 67 by April 2028.