And most retired Brits choose to stay independent when entering this exciting chapter of their lives. It’s increasingly unusual in the UK for retirees to live with their children, according to Phillipson. If they’re not working, it’s more common for them to spend part of their later lives overseas in Spain, France, or Italy.
Of course, living abroad costs money, and the number of economically inactive 50 to 64 year olds in Great Britain jumped from 11% in 1976 to 27% in 1999, according to Dr. Joseph A. Gribbin, an affiliate professor at the University of Maryland, Baltimore County’s Erickson School of Aging, Management and Policy.
This increase, coupled with The National Insurance System for the UK (Britain’s version of Social Security), raises some concerns about the financial viability of this segment of the country’s aging population.
Lower pensions
“The basic state pension system in the United Kingdom is the fifth lowest in Europe, and it’s substantially lower than that in the United States,” Gribbin explains. The U.S. Social Security system employs a two-tiered adjustment to determine benefits, taking into account wages and inflation. The UK’s system only accounts for inflation, bolstering its solvency at the expense of retirees.
Based on a 2006 study from British asset management company AXA, the UK’s current retired population receives about £256 ($505) a week. This could explain why the British plan for retirement earlier than the rest of Europe. On average, the British begin saving for retirement at age 28 compared to 31 in Germany, 32 in France and Italy, and 34 in Spain.
A decline in continued learning is another concern in the UK. Britain’s National Institute for Adult and Continuing Education (NIACE) found that only 32% of the 55- to 64-yearold population considered themselves learners in 2005, and 38% of this demographic said they have not participated in learning at all since leaving full-time education.
But experts like Phillipson believe this will change. “I think [continued education] is going to become a big thing here because the funding bodies for education are starting to wake up to the fact that they will have fewer young people in a few years’ time,” he says.
New demand for older workers
The UK job market will likely wake up to this fact as well, creating a new demand for older workers. The NIACE estimates that over the next decade, there won’t be enough young people to serve the British workforce due to migration and declining fertility rates. Consequently, older adults will have to delay or return from retirement to fill nearly two-thirds of the available jobs.
Employers will also have to make changes like increased flexibility to entice older Brits back into the workforce. “On the one side, you’re trying to argue that because of the aging population you have to keep people in work,” Phillipson says. “But the nature of the work has to be considered in terms of whether it engages people and persuades them to keep working into their 60s.”