Number of people in retirement drops by over a quarter of a million in five years

The number of people in retirement has dropped by 265,000 over the five-year period from March to May 2013 to March to May 2018, according to the Office for National Statistics' (ONS) July UK Labour Market report.

The ONS has reported that 32.4 million people were in work between March and May of this year, 137,000 more than for December 2017 to February 2018 and 388,000 more than in the same period last year. Between March 2017 and March 2018, public sector employment fell by 102,000 and private sector employment increased by 542,000, meaning that 16.5 per cent of all people in work between March and May were employed in the public sector (the lowest proportion since quarterly records began in 1999), and the remaining 83.5 per cent worked in the private sector.

Self-employed people represent 14.8 per cent of all people in labour, at 4.79 million, indicating a slow down in the number of people looking to work for themselves.

A total of, 80.1 per cent of men aged 16 to 64 years were in work, the highest employment rate for men since February to April 1991, and 71.3 per cent of women aged 16 to 64 years were in work, the joint highest employment rate for women since comparable records began in 1971.

Aegon head of pensions Kate Smith said that the drop in the number of people in retirement was likely to be a growing trend, as Aegon's own research has indicated that more than one in four people think they will be working either full or part-time at age 70.

“The increase in the employment rate among women over the last few years due to the changes to the state pension age for women has also contributed to this reduction in the number of people retiring and we will start to see this impact on men as well," she said.

“With the state pension age rising to age 66 for both men and women by 2020, it’s understandable that more people will defer their retirement in line with state pension age increases. The advantage of remaining in employment for longer is that people can continue to build up more of a private pension, including from employer contributions, this along with delaying taking their pension can make a big difference to their overall retirement prospects.”

She added that the stabilisation in the number self-employed workers should not let the government off the hook when it comes to finding a pension solution for sole traders and directorships.

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