Introduction to April Newsletter (published 30 April)

In a high profile launch of a new organisation, “The Life Trust Foundation”, Lord Hunt of Wirral described the financial implications of an ageing UK population as a “ticking time bomb of longevity” and the United Nations has described the overall impact as second only to global warming. As a consequence in my prime, as experts in the field, was invited to comment on the subject on BBC Three Counties Radio last week. We also had the opportunity to address a meeting of members the Chartered Institute of Management Accountants who found it a great eye-opening experience, with plenty of food for thought.

But still, in commerce and government alike, the topic is treated as the archetypal “elephant in the room”. Everyone knows it’s there, everyone can see it, but nobody wants to acknowledge it or talk about it or do anything about it. However, time is running out and there are lots of questions to address – not all of them bad. Again, only last week came the announcement of another new marketing agency being established to meet the needs of the over 50 consumer. This brings us to another question, before anyone makes the point. Is there such a thing as an over 50 consumer? Should we feel pleased that people are taking notice of our requirements and our concerns, or do we feel that we are being patronised? Personally, I am totally comfortable identifying clearly what features I am looking for in a product or service, articulating this succinctly and then “putting my money where my mouth is” in a mature, adult fashion.

The elephant has landed

So what are the facts as far as the emerging demographics are concerned? The following are just some of the statistics we have analysed, all based on data from the Office of National Statistics and the Government Actuary’s Department.

By 2031, less than 25 years away, over one-third of the UK population will be over 55, while 22% will be over 65. There are two major implications of this. Firstly, the working lives of individuals will have to extend beyond 65 to ensure that there are enough in the workforce to meet the nation’s needs. Secondly, the notion that retirement is just a few twilight years after a lifetime of slog is no longer relevant.

Retirement is likely to cover a considerable amount of time and must be paid for. However, those aged from 16 to 64 will not be enough in number to fund the retirement of those of 65 plus. The dependency ratio, which has been falling for a very long time, falls even further. In 1971 there were 4.6 people in the 16 – 64 bracket for every person of 65 plus but this will fall to 2.7 by 2031. It just won’t be possible or acceptable for those working to fully support those in retirement.

We are, therefore, seeing the harmonisation of men/women retirement ages, the gradual increase in all retirement ages, and severe pressure being put on personal and state finances in respect of such things as pensions, health costs and care costs for the elderly.

Looking at life expectancy in more detail, in short people are living ever longer. Taking into account improving mortality rates men of 65 now can expect to live until they are 86 and women to 88. And the trend of greater and greater life expectancy will continue for the foreseeable future. Current 40 year-olds who make it to 65 can expect to live into their nineties or very close to.

Even with increased state retirement ages, it appears that men will have a retirement of about 22 years to look forward to and women will have about 24 years. However, 22 or 24 years is a long time to finance oneself without working, a long time to fill in an interesting, fulfilling and valued way, and a long time to stay physically and mentally healthy. It means people will work for, say, 40 to 50 years and then be without paid employment for 20 to 25 years. In itself this is a lot of years but it is also a large proportion of one’s life.

But length of life is not automatically associated with quality of life and, while life expectancy is increasing, a number of our final years will be in less than perfect health. On average men can expect about 7 of their final years to be associated with a limiting longstanding illness and women about 9 years. There is still a lot to do.

In terms of working longer we are already seeing increased numbers of people working on beyond state retirement age. Over the past two years the general increase in working numbers has been in total about 2%. However, for men over 65 the growth has been 12% and for women over 60 the growth has been nearly 15%. Although these latter figures are still fairly low in absolute terms they are growing rapidly as many people choose or feel the need to continue working longer.

Fight ageing. Get moving

May has got to be the perfect month to get up out of your chair and get going. Whether or not it’s sunny, it’s LIGHT and generally warmer – definitely a great time to do something physical. The link between longevity, good physical and mental health, and exercise is absolutely beyond question. So how come so many of us still seem to do so little about it?

Okay, we know the answer. It can be difficult and time-consuming and if you don’t find an activity you’re passionate about, downright boring. However, last month, a new study published in the British Journal of Sports Medicine claimed that taking regular aerobic exercise could help turn back our biological clocks and delay ageing by up to 12 years.

‘Aerobic’ exercise always sounds particularly scary  (redolent of aerobics classes - popular in the eighties and hard work) but actually all it means is a level of exertion ‘enough to raise the heart rate to 120 beats a minute or higher’ – which can result from as little as a brisk walk, swimming, cycling or jogging. The benefits in terms of strengthening the heart and lungs, reducing fatigue and adding to overall quality of life are impressive – you just have to do it.

As another London marathon has recently come and gone we were interested to find out how many in my primers participated in this particularly impressive event and were astounded to find that out of a total of 34,420 people who completed the marathon, 4,817 were over 50 - 160 of whom were over 70! Makes doing anything less seem, quite literally, a stroll in the park.

So next time you’re contemplating whether you can be bothered to leave the car behind and walk, or whether to get someone in to mow the lawn, just remember these figures. There’s obviously no automatic reason why we have to slow down physically over 50, so if you haven’t been as active as you might of late, resolve to make May the month you change your habits.  You will reap the benefits in terms of reduced stress, depression and likelihood of developing a range of problems including diabetes, heart disease and muscular and skeletal ailments.

Hello! It’s me! Is anyone there?

A number of companies are now producing mobile phones which are geared towards “the aged or technophobic” (not my words) and one, which sold 250000 across Europe in the last year, is now launching its second generation version. It doesn’t have loads and loads of fancy features but the ones it does have do seem useful for its intended market – I refuse to use their heading “Mobile for the over 50s set to ignite the silver sector”

The phone has the following attributes: a super loud hands-free speakerphone, over-sized (how can this be?) display and buttons, flash light, hearing aid compatible, one press “in case of emergency” facility, a standby time of 250 hours. (If you want to continue taking the stones out of horses’ hooves you’ll still need your Swiss army knife.)

We’re not quite so enamoured of the price, £145 for pay-as-you-go. It looks a bit like the phone equivalent of supermarket organic foods.

In my prime welcomes such developments and does not find them in any way demeaning. Nobody is forced to buy one. To be honest, our first stance is always to master the technology, as intended, rather than look for substitutes. However, it is a fact of life that as we get older certain parts of us no longer function as well as they did before. But that should not lead to social or workplace exclusion. It’s all very well casually assuming that people will have to work into their mid-seventies but, unless the environment becomes more age-friendly, it will just not be possible. Employers will continue to find ways to be ageist, citing inability or declining performance, when a serious consideration and re-designing of the tasks or more sensible, more appropriate equipment will be all that is needed.

The problem’s not going to go away.

Humphrey Lyttelton dies at 86, still young at heart

We’re all very, very sad to see the recent passing of Humphrey Lyttelton, a person with so many talents and endearing qualities. What is so amazing is that many of his finest years, and our fondest memories, occurred only once he had passed 50, 36 years ago. Although already a jazz musician of considerable repute, most of his more than 40 years of hosting Radio 2’s The Best of Jazz took place after many of us would be considering slowing down and retiring. And the crowning glory, 36 years of chairing “I’m Sorry I Haven’t a Clue” since its inception in 1972, was all played out once he was already “in his prime”. What greater advertisement could we come up with for the ideals we are trying to promote than the real, magnificent “Humph”?

Book of the month

1001 little ways to look younger

by Emma Baxter-Wright, published by Carlton Books, 2007.

We like self-help books. They may not necessarily contain much that’s hugely deep and meaningful or even much that’s really new but they’re a great way of reminding yourself of some of the things you can do to change your life and can provide a much-needed tweak to motivation. We particularly like self-help books you can dip into and read quickly (like our own Primetastic!), so when we heard about this book we were keen to find out more.

Regrettably the cover of the book appears to have been designed for a totally different readership than the ageing individuals who one assumes would want to buy it. It has an illustration of a young woman (early 20s) who bears no relation to what an older person’s idea of ‘younger’ – for ourselves – could possibly look like. Although this title appears to be part of a series, and this is the overall series look, it’s still difficult to see why anyone thought this image was a good idea.

The back cover blurb also seems unclear about who the book is written for, referring to anti-ageing remedies, solutions for wrinkles, and improving your mental sharpness but then talking about staying young and beautiful (much as we might wish it, over 50 that just isn’t an option…)

However, if you get past this, the rest of the book is fine. As the title suggests, it contains 1001 short tips to help make the most of what we’ve got and look and feel younger. Tips are divided into sections including skincare, hair, wardrobe, fitness, health and nutrition, smoking, staying slim and mind and body. Whether or not they all work, who knows? But it’s food for thought, and even if we only choose to try out one or two new things, it’s bound to be better than doing nothing at all.

Can you afford to retire?

We’re now seeing a steady stream of information and surveys in relation to the ability, or otherwise, of people being able to retire when they would like to, in good financial health. While much of the research is coming from financial institutions and politically motivated think-tanks, both of whom have significant vested interests, the messages coming through are extremely consistent. Furthermore, they have huge implications for people of all ages.

In a couple of years we’ll start to see the moves towards harmonisation of male and female state pension ages, so that by 2020 the generally accepted retirement age will be 65 for everyone. And this itself will rise in stages until, sometime in the period between 2044 and 2046, 68 will become the starting point for state pensions. With so many people now living to a ripe old age this pension will become a smaller and smaller proportion of what we will have to live on. Even retiring at 68 is likely to give us a good few years of retirement with life expectancy now into our late 80s and, if we get that far, then taking us into our nineties and above.

There is no doubt that we’ll have to supplement our government pensions with other forms of finance, whether direct savings, pensions plans or money released from investing in property. But first we have to be able to understand the issues, to afford to save, and to have confidence in the methods available to us. Research by a think-tank, The Policy Exchange, reveals that fewer than 1 in 4 workers (24%) have a private pension as their main additional source of retirement income to the basic state pension, down from 39% in 1991/92.

Of course, many people are now pinning their hopes on their property financing their old age, either through downsizing or through equity release. We’re fast moving away from the notion that we’re each the head of a dynasty and we’ll be handing down riches for our children to enjoy. We’re now more likely to be thinking that we come into the world with nothing and we leave with nothing, and we must manage the process in between. More probable is the notion that we need to help our offspring when they’re young and starting out and that they’ll have to help us out in later years.

However, while some are telling us that our properties provide the solution to our problems, others are quite rightly issuing words of caution. As Standard Life points out, the capital sums released by downsizing may on the surface look quite large but they are unlikely to support a satisfactory lifestyle for as long as people may think or wish. Likewise, we are being exhorted to consider equity release and are told that the markets in the USA, Australia and New Zealand are more advanced than here in the UK. But, while releasing cash in this way certainly has its place the current trend to offer it those who may only be in their fifties may lead them to run out of resources much too early. Working that bit longer first is the recommended option.

With regards to the young starting to save for retirement, there are mixed messages. AXA tell us that people in the UK start to save for pensions earlier than anywhere else in Europe (possibly due to lower state pension expectations) but research conducted for the Skipton Building Society suggests that those under 35 face working until they are 76. This is dubbed the Tiswas generation after the Saturday morning children’s TV programme (Today Is Saturday Watch And Smile). Many just cannot afford to save enough leaving them with few options. They must either earn vast amounts of money later and save some, or live on peanuts in retirement or, as suggested here, work longer before retiring. If the state pension age becomes 68 in 2044 it will be applying to someone born in 1976 who is now 32. Working into one’s seventies will become the norm – which brings us to another question. How fit will we be at that age and how age-friendly will the workplace be?

Tiswas doesn’t stand for “Thirties – Insufficient Savings – Work And Suffer” but could.

And, as mentioned before, there is not going to be support from parents - quite the reverse in fact. That “sandwich generation” now coming through is retiring in more and more debt, according to Help the Aged and Barclays. And AXA anticipates that more and more older people will be looking for financial and material support from their children in retirement as is the case in many other countries and cultures.

So, unless this all a great big bad dream that we’ll awake from shortly, pretty soon there is going to have to be a large reality check and adjustment for many people. One of the urgent tasks must be good financial education and advice for everyone so that they can comprehend the nature and implications of what is going on.

In my prime and on holiday abroad

As an alternative view on what it’s like to be in your prime, particularly for those over 55s who do have the resources to take holidays and enjoy themselves, comes a warning from the Foreign Office entitled “Overseas And Plastered phenomenon” (OAP - another witty acronym?). While the advice is basically sound, it did smack of coming from the John Cleese University of the B******g Obvious. Issued just before Easter it has aroused a great deal of indignation from journalists and readers alike. “Patronising” was a word often seen.

We don’t disagree with the basic sentiments and the call for sensible preparation and behaviour while on holiday but we are talking about people who are old enough and experienced enough to make their own choices and take the consequences.

And so, we reproduce the warning as published, and can do no better than then refer you to two articles in the Times Online (by Janice Turner and Minette Marrin) which provide another perspective.

“Taking risks abroad has no age limit
Foreign Office warns of Overseas And Plastered phenomenon

Although most of you might think that when your parents go on holiday it’s a civilised affair, this isn’t necessarily the case. Research from the Foreign and Commonwealth Office shows 1 in 5 older travellers take risks abroad that they wouldn’t contemplate at home, with favourite activities ranging from bungee jumping and parasailing to water-skiing and moped-riding. Hardly surprising then that 1 in 5 couples say they or their daredevil partner has been injured along the way, which is even more concerning when 65% of older travellers have previously admitted they didn’t take out travel insurance on their last trip abroad.

The research which surveyed over a thousand Brits aged over 55 further shows that older travellers are indulging in one Martini too many, putting their safety at even greater risk. Over half admit they drink more alcohol than usual whilst on holiday and a third say they’d indulge even more in an all-inclusive resort where the booze is included. This, according to the British Embassies in popular resorts, can lead to problems and has previously caused incidents of drowning.

What concerns the Foreign Office most is that more than 8 in 10 people don’t routinely have a health check before embarking on their travels, with more than a third never doing so, believing that they will feel better after a break in the sun. However, if pre-existing illnesses or undiagnosed symptoms flare up whilst away from home, receiving urgent medical attention can be costly.”

“I want to be a saga lout” by Janice Turner

“Saga louts cause ‘holiday havoc’ and ignore health risks” by Minette Marrin

Silver surfers come of age

Gradually the world is coming to terms with the fact that being over 50 does not involve “life, but not as we know it”. Nowhere is this more relevant than in the realm of computer and internet knowledge and usage and, thankfully, we are beginning to see the end of terms such as “silver surfers” and “cyber wrinklies”. They will soon go the same way as “blue rinse brigade” and “grey pound”.

A recent poll of 3500 people over the age of 60, conducted by the networking site “alljoinon” provides a whole range of information showing just how much older people are wedded to the web and what they use the technology for. The average time people spend surfing the web is a staggering 2 hours per day.

But consider the notion in more detail and it doesn’t seem staggering at all. Older people have more time and, possibly, less mobility than their younger counterparts. They have been brought up used to being patient, to reading and to considering matters before making decisions. And we, in our prime, are not the confused old buffoons that the younger generation take us for. We can read instructions and we have as much (or as little) chance as the vast majority of youngsters at grappling with the inner workings of the machinery.

But the uses are virtually limitless: emailing to family or to friends far away; making business or social arrangements or running clubs or societies; shopping online, conveniently and at the best prices; arranging holidays; pursuing hobbies; photography; social networking; keeping mentally alert with quizzes and games such as chess and bridge; downloading music; obtaining medical and financial information and so on. In fact, as the survey found, once aboard it would leave a large hole in older people’s lives if it was taken away.

Furthermore, a survey for the credit card protection firm CPP showed that older users, in this particular case 45-54, are a lot more cautious and savvy than their younger brethren when it comes to online security. “It is surprising that young people take the most risks online, where you might assume that they would be much more ‘web aware’ than the internet’s older users,” said CPP identity theft expert, Danny Harrison.

He advised website users planning a transaction to check web pages were secure by looking for the padlock symbol in the right hand corner of the web page. The internet address prefix “https” should also help protect card details, he said.

And when it comes setting up our computers or fixing them when they go wrong then, if we can’t resolve it ourselves, we must treat the situation in much the same way as any other domestic problem - car, plumbing, electrics – we must be prepared to call in a specialist. There are now a number of readily accessible firms in existence, as recently reported in the Times (“Computer geeks to the rescue”).

The messages are there for all to see and not just for those who have retired. Those over 50 seeking employment must make sure that their skills are continually honed; otherwise they won’t be attractive prospects to employers. Advertisers must start to realise the enormous potential of the over 50s population and change their whole approach to the design and focus of web material. And individuals and government must start to realise the potential dangers of a two-tier society with regard to computer accessibility. A recent USA survey acknowledged that online ageism does indeed exist and needs to be addressed.

Unlike those that we might currently consider to be truly elderly, the present generation of in my primers will move into their later years well-equipped in the ways of modern technology which will become more and more part of our everyday lives. The European Parliament has, just this month, voted to devote 150 million euros over the next five years to a new research programme known as “ambient-assisted living”. The move is intended to help people live more independent lives in their old age. The 27-nation bloc’s ageing population will see a nearly 40 percent jump in the number of people aged 65 or older between 2010 and 2030, the European Commission has said.

“We need to make the Internet more accessible and make training available and allow elderly people to stay socially connected and to perform daily activities which can be facilitated, such as shopping, paying bills and making appointments,” said parliament member Neena Gill of Britain.

The European Commission hopes the research into information technology for older people will foster telemedicine, where people obtain a diagnosis and other medical advice online, and other aids such as turning all but one light off when going to bed. Technology can also be used to check for water and gas leaks and making sure windows and doors are locked when leaving the house.

And so I say a hearty “Hi Yo Silver (surfer)!”

What the numbers are telling us

Introduction

The world seems to be hotting up as far as older workers are concerned with an increasing number of surveys and statistics now being published and commented upon in the public arena. The only problem is that we are receiving mixed messages from all this information, in part due to the way it is being collected and interpreted.

This may be because we now really are reaching the “tipping point” whereby those issues which have been “just around the corner” for some time have finally reached us and the tension is beginning to show. However, the cultural and attitudinal changes required in the workplace are not yet generally accepted as inevitable and so a vigorous rearguard action is being fought.

Furthermore, with an ageing population, there are also any number of societal ills to be confronted and political points to be made and so there is endless scope for using the information for whatever end seems appropriate. That is not to say that there aren’t some very urgent issues which need to be addressed and which will affect everyone. Below we provide a few illustrations of the information which has recently become available.

Latest employment statistics

The latest employment figures published by the Office of National Statistics show a generally buoyant picture for the year just gone although this may be the calm before the storm, if the economy takes a significant downturn this year.

What is of particular interest to us is what has been happening to the over 50s employment position. The hard facts are that the UK finished 2007 with 29.4 million in employment, an increase of 296000 over the previous year. Of this increase 172000, or nearly 60%, is accounted for by the over 50 population. The total of over 50s in work was some 7.8 million, the highest total since records began. There genuinely does seem to be a trend for people to be working till later in life.

These then are the bare facts and they have been the subject of varying interpretations in the press. The Daily Mail has suggested that the “Over 50s are being forced back to work to meet rising bills”. They go on to say that “Poor pensions, sick partners, elderly parents and grown up children who need financial support are common causes for working, rather than retiring.”

While we would agree with the various reasons for continued working, their first assertion sits uneasily with the perceived difficulty for over 50s to find employment and the received wisdom “that most new jobs are being taken by migrant workers – a group overwhelmingly aged under 40” (CIPD). The Chartered Institute of Personnel Development go on to suggest that the explanation is that migrant workers are taking most of the new job vacancies but that older workers, in place, are staying in their jobs and delaying retirement.

Whether this latter phenomenon is due to financial pressures forcing older workers to cling on to their jobs, or a perception by employers that there really is a growing skills shortage, or the realisation that lifespan is increasing rapidly and will need to satisfactorily filled, much remains still to be understood.

However, for the foreseeable future it will remain much easier for older workers to remain in place than to find new employment. Hence, anyone contemplating retirement whether to enjoy those “golden years” or because they are sick of working, should make sure that they have thought it all through fully and carefully.

One in five still pressured to retire by their employers

Portraying a different perspective on the UK employment scene, research by leading insurer AXA has revealed that, despite the introduction of age discrimination legislation in 2006, ageism is still rife in today’s workplace with many retirees experiencing pressure to quit their job by their employers.

Of those retiring early, whilst 80% did so through choice, one in five (20%) experienced pressure from their employer. This, at least, is down on the previous year’s figure of 28%. For the full AXA press release click here.

And More….
And so the plot thickens.

More work by the CIPD suggests that the demand for working beyond 65 looks set to increase markedly in the next 15 years. Based on a survey of 1000 workers aged between 50 and 64 years, it finds that just under two-fifths (38%) of individuals plan to carrying on working beyond 65. Currently only 11% of the workforce work beyond State Pension Age.Interestingly, among those who said that they did not plan to work past 65, 31% would change their mind if their employer allowed them to work flexibly.

For the full CIPD press release click here.

And in another study, Stepstone, an online recruitment firm, suggest that in Europe, America and Asia companies have admitted for the first time that older workers are the key to filling the skills gap, although they have done little about it to date.

And all of this is taking place in a climate of increased and increasing life expectancy and pressure on pensions. The UK Pensions Regulator is now going to require that company pension schemes assume that for men retiring today at 65 they will live to at least 89. This will put even more pressure on the continued existence of defined benefit pension schemes.