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  • June 2014
06

IFS: more older women in work by the end of the decade

Open-access content Thursday 26th June 2014 — updated 5.13pm, Wednesday 29th April 2020

The proportion of women in their late 60s in paid work will have increased by 2020 and they could be set to outnumber working men in this age group, the Institute for Fiscal Studies has said.

An IFS report, sponsored by the Joseph Rowntree Foundation and the IFS Retirement Saving Consortium, projects the demographic and financial circumstances of people in England aged 65 and over until to 2022/23.

It found that employment rates for women in their late 60s were already at their highest level for 40-years. The IFS cited the improving health of women and a rise in the state pension age as factors pushing the trend.

Katy Heald, IFS senior researcher and lead author of the report, said: 'Employment rates for women in their late 60s will increase further and faster over the next few years, approaching or even overtaking those among men of the same age.

'This reflects improving health, as well as being a response to the rising state pension age. Of course while increasing earnings will boost the incomes of these women, longer working lives will not necessarily leave them better off in a broader sense.'

By 2020/21, the employment rate of women in the 65-69 age group could reach 37%, compared to 16% in 2010/11 and just 8% in 2000, the IFS said. Meanwhile, the employment rate for men in this age group was set to rise from 29% to 33%.

Not only will women still be in work, and therefore better off, they will also be healthier and less likely to be widowed as their husbands will live longer, said the IFS.

It noted that increasing life expectancy, plus the fact that mortality rates are lower for those in couples, means that far fewer pensioners will be living alone in the future.

By 2022/23 more than a third (38%) of pensioners aged 85 and over could be living in couples, up from 25% of pensioners in 2010/11. This would accelerate a trend which has already seen the proportion of those aged 85 and over living in couples increase by about 10 percentage points between 1900 and 2010.

Incomes for retirement people are also expected to rise.

The IFS said net incomes of 65- to 74-year olds would grow by an average of 3% per year between 2014/15 and 2022/23, boosted by higher gross earnings. For those aged 75 and over, net income will grow at 1.6%.  But pension incomes for the poorest will grow by about 1%.

IFS research economist Andrew Hood added that incomes of those aged 65 and over would continue to rise, partly reflecting higher employment rates. 'As a result, levels of poverty among this group will keep falling, particularly for couples, and income poverty will become increasingly concentrated among older single women,' he said.

This article appeared in our June 2014 issue of The Actuary.
Click here to view this issue
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