ILC-UK and the Actuarial Profession debate: Changing the perception of retirement. Supported by Swiss Re

Changing the Perception
of Retirement
1 March 2012

Twitter - #retirementperception
This event is kindly supported by Swiss Re

Welcome

Baroness Sally Greengross
ILC-UK


The ‘unavoidable obligation’ of
working longer: do we want our
working lives extended?

Professor Sarah Vickerstaff
University of Kent

Sarah Vickerstaff

The ‘unavoidable obligation’ of working
longer: do we want our working lives
extended?

On the threshold of a new era?

In an era of workforce ageing and
increasing life expectancy working longer
may be presented as an:
‘unavoidable obligation’ (Reday-Mulvey 2005: 195)
‘a fiscal and social imperative‟ (PWC, 2010)
Or simply:
live longer work longer (OECD, 2006)

‘If only we could print more taxpayers’

Banx FT 26.3.09

Where we are now?
• UK has moved away from „mass fixed age retirement‟ and we now have more
individualised experiences of retirement (for example: Rees Jones et al 2010)
• More difficult to say when „retirement‟ happens
• Survey data steers us towards health, finance, job security, marital status and
caring responsibilities as the key determinants of retirement timing, but in the
messy reality of domestic lives and relationships it is the interaction of such
variables, which will determine actual outcomes
• Surveys leave a lot of behaviour unaccounted for: people in comparable
situations don‟t always behave the same way, i.e. ill-health is a major
predictor of labour market withdrawal but still lots of people with health issues
continue to work
• This suggests that dominant „push and pull‟ models of retirement are less
relevant?

Assumptions of the extending working
life agenda
• Individuals are still choosing to retire too early
• Individuals are not planning and saving enough for their
retirement
• Focus of policy action on persuading individuals to delay
retirement, make more sensible decisions
• Employer action such as managing later careers,
providing opportunities for downshifting, gradual
retirement and bridge jobs will somehow organically
appear

= the target for the agenda is presented as a de-gendered
and individualised „adult worker‟ in a benign employment
situation (on the adult worker model see Lewis, 2007)

Insights from qualitative research

• Commissioned by Department for Work and Pensions –
„Extending working lives‟
• Interviews with 96 people, data on 57 couples
• Based in three areas of Britain: Edinburgh, Nottingham and
Thanet
• Sample selected on the basis of age (50-64), income, labour
market status, health and domestic circumstances
• Time-line allowed for an insight into life-course of
respondents – suitable for examining process of retirement
Vickerstaff, S., Loretto, W., Billings, J., Brown, P., Mitton, L., Parkin, T. and
White, P. (2008) Encouraging Labour Market Activity among 60-64 year olds,
DWP Research Report No. 531. Available from:
http://www.dwp.gov.uk/asd/asd5/rrs-index.asp

Do people want to work for longer?

• There is a conundrum in existing research on
what older workers want
• In a range of surveys, those 50 + are found to
hold positive views about work, and many
express a willingness to consider extending
their working lives or continuing to work after
they have „retired‟
• Qualitative interview or focus group–based
research on the same theme reveals a much
more qualified picture

Surveys
• McNair and colleagues in 2003/2004 found
that „older people are strongly attached to work
(though not always their current jobs)‟ and that
a high proportion said that they would consider
some form of paid or unpaid work after formal
retirement (McNair, 2006)
• In a recent survey conducted for EHRC ¾ of a
sample of 1,494 individuals aged 50-75 said
that they „were currently working because,
among other things, they enjoyed their jobs‟
and that „their work was worthwhile‟ (Smeaton et al,
2009)

• Both surveys noted considerable variation
among different occupational groups

Qualitative research

• Desire to extend working life seems much more
qualified
• A focus group based study concluded that
people seemed to sustain two conflicting
models of retirement at the same time: one
aspirational involving a vision of an active and
fulfilling period of life after work the other much
grimmer composed of an image of a time of
decline and potential privation
„Stopping work before „retirement age‟ is
usually seen as a bonus and – by extension –
working beyond it is a penalty” (Hedges et al, 2009:2)

Choice and Planning

• Unexpected health events, including illness of partner or
other family members
• Caring responsibilities: increasing importance of grand
parenting for example
• Redundancy, „voluntary‟ early retirement
• Combinations of circumstances:
‘And so what encouraged you to kind of finish working
completely?
One was the state of health of my mother….Two was the stress at
work for the money that you‟re paid.‟ (NS76Female)

• The language of „choice‟ about labour market withdrawal
flies in the face of what we know about how the
employing organisation structures retirement options,
access to training and flexible working opportunities, not
to mention job satisfaction and motivation issues- how
realistically might work be made more attractive?

Overview of attitudes : would consider
working for longer or after retirement
• Strong gender differences: women give social
reasons or need to keep busy
• Health pessimism
• Preference for flexible work, part-time or short
contracts: „ a little part time job‟
• In a different job
• Little sense of planning for this: fantasy jobs
• Work needing to fit round other aspects of life
and not vice versa as had been the case during
much of working life

The social embeddedness of decisions
• A common assumption is that people will work longer if they
cannot afford to retire but this study shows that whilst finance is
important it was only one factor in couple‟s decision making.
• Major gender differences reflecting gendered work histories and
experiences
 Women who had worked below their capabilities were more likely to
want to stop work early
 Men who had worked for 40 years or more felt that they had done
their bit

Once folk get to a certain age, they want to look at and do other things,
I‟m sure rather than the treadmill of work. I feel that after having done
30, 40 years of work, it‟s a just rewards if you‟re able to sit back and
relax.(EMale)
• Domestic contexts far from static - again emphasises importance
of viewing retirement as a process not an event
 Highlights limitations to the notion of „retirement planning‟

Couples
• Decisions around retirement most often taken as a couple and very
heavily influenced by domestic contexts and work histories, some
evidence of joint retirement timing
• For many women who had not pursued careers of their own their
retirement trajectories were typically contingent on their male
partner‟s pathway. In particular, the male partner‟s financial situation
and health and wider family caring obligations were key factors in
retirement timing
„How much longer do you think you’ll work for ?
Heaven knows!
Do you have a date in mind? A year in mind?
I‟d love to go tomorrow! But no, it all depends upon the pension, on
Phil‟s pension‟ (NFemale)

• Relationships between couples may be changed by external shocks
such as ill-health or redundancy, whilst in other couples such
unanticipated events reinforce traditional ways of doing things,
indicating how dynamic the factors affecting retirement are.

The gender contract

17

Health pessimism

• People understand that we are living longer
but concerns over future health reinforced
traditional „cliff-edge‟ retirement:

So from our point of view, we just want to enjoy it
[retirement] while we‟ve both got health to do it.
Because there‟s so many people work right to the
end of their retirement, you know, whether they‟re
60 or 65, and never get a good retirement, you
know, for health reasons, and, well, we feel we‟re
fortunate we can do it now and enjoy it. (EFemale)

Preference for part-time flexible work
The idea of part-time paid employment, that is something I
certainly will consider. But nothing to do with teaching
or education. Although teaching supply is very lucrative,
it‟s not something I could even… I couldn‟t contemplate
going back into the classroom.…But a wee part-time
job for financial remuneration, is quite likely. (EMale)

So I won‟t be doing regular work but I won‟t necessarily be
stopping altogether. It‟s just so that it enables us if we
want to go on holidays for 6 weeks to Spain in term time
we can go because we‟ve got a caravan so we take it
abroad so…(NFemale).

Realistic part-time aspirations?
I didn‟t want to go back full-time. I would go back part-time
perhaps. But then again it would have to be a very, very
decent salary and short hours, and long holidays!
(EFemale)
…but the thing is about any job that I would want, is I need the sort
of job where I can say… I‟m maybe just on the internet
and looking at flights and things and “God, look at… I
could fly to so and so next week for that” and I‟ll go and
on the meantime you‟re on the shift that they need you at
B&Q or whatever… I would need to be able to say “oh I‟m
not coming in next week” and very few employers would
give you that flexibility. (EMale)
If I could work one day a week and just take off when I wanted I
would still work but I don‟t think any companies would let
me do that now. (NFemale)

The role of employers

• Employers provide information on pensions but
not on other issues to do with continuing work
or managing retirement
• Employers and employees may define „flexible‟
work in quite different ways
• Everyone thinks gradual retirement is a good
thing but not much of it happening
„And they gave me a huge pension folder, if you
like, telling me a whole load of stuff that you
just don‟t understand.‟ Basically.‟ (EMale)

Context for change

• The „unavoidable obligation‟ to work longer if
we live longer arrives at a time when prospects
in the labour market for older people are
worsening
• When ill health routes out of the labour market -
important for a subsection of the older
workforce – are being closed off
• When state pension ages are rising
• And when the value of pensions diminishing

Conclusions: the extending working life
agenda

• Positive views about work from older workers but
often less happy with current job
• Major differences between older workers
• Not much flexible work for older workers or gradual
retirement is actually happening
• Job quality as well as flexibility is an important
factor in extending working life
• Not much evidence so far that organisations are
embracing more active age management

Conclusions: what we need to know

• Need a much more differentiated picture of the „older
worker‟ which reflects the long run effect of advantages
and disadvantages across the life course, i.e. impact of
class, gender and race
• Need a less individualised view of the older worker in the
sense that most older workers are thinking about and
making decisions about working and retirement in a
specific domestic context
• Evidence that people are embracing the new orthodoxy
of live longer work longer is scant: the factors affecting
retirement timing will not be changed quickly

We need to situate older workers in
complex temporal environments:
Health

Motivation,
Family and
capabilities, skills friends

Nature of work Policy context

Organisational
context

References
• Hedges, A. Sykes, W. and Groom, C. (2009) Extending Working Life: Changing
the Culture DWP Research Report No. 557, London: HMSO
• Lewis, (2007) „Gender, Ageing and the „New Social Settlement‟: The Importance
of Delivering a Holistic Approach to Care Policies‟ Current Sociology, 55, 271-
286.
• McNair, S. (2006) „How Different is the Older Labour Market? Attitudes to Work
and Retirement Among Older People in Britain‟ Social Policy and Society,
5(4):485-94.
• OECD (2006) Live Longer, Work Longer, Paris: OECD.
• PricewaterhouseCoopers (2010) Working Longer, living Better: A Fiscal and
Social Imperative PricewaterhouseCoopers.
• Reday-Mulvey, G. (2005) Working Beyond 60, Basingstoke: Palgrave Macmillan.
• I. Rees Jones, M. Leontowitsch and P. Higgs (2010) “The Experience of
Retirement in Second Modernity: Generational Habitus among Retired Senior
Managers‟ Sociology, 44(1): 103-120.
• Smeaton, D., Vegeris, S. and Shain-Dikman, M. (2009) Older Workers:
Employment Preferences, Barriers and Solutions Manchester: EHRC.
• S. Vickerstaff, W. Loretto, J. Billings, P. Brown, L. Mitton, T. Parkin and P. White
(2008) Encouraging labour market activity among 60-64 year olds DWP RR531,
London: HMSO
• S. Vickerstaff (2010) „The „Unavoidable Obligation‟ of Extending Our Working
Lives? Sociology Compass 4/10: 869-879.

Retirement in flux

David Sinclair
ILC-UK


Retirement in flux
Changing perceptions of retirement
and later life

David Sinclair,
Assistant Director, Policy and Communications . ILC-UK

The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

Contents

 History of retirement
– Retirement is a relatively modern construct

 Where are we now
– Retirement has grown to 20 years

 The future of retirement
– Citizenship in retirement – What are our rights and
responsibilities?


What is retirement for?


Retirement is relatively new

 For most of human history, most
people have worked – either
formally or informally – up to or
close to the point of death, due
simply to economic compulsion.
 (Generally) pensions provision
precedes the emergence of
‘retirement’ as a specific and
substantive period of life.


Year Early Developments
1670s First organised pension scheme for Royal Navy officers.
1880s Otto von Bismarck’s government provided the first state
pension in Germany
1909 Old Age Pension introduced on ‘Pensions Day’, 1 January
1909. Means-tested benefit available at age 70.
1921 The budget made tax relief available for occupational
pension schemes. Limits on tax relief introduced in 1947.
1925 Introduction of a contributory state pension for manual
workers and other low-income workers. Eligibility at 65.
1946 National Insurance Act established a contributory state
pension available to all.


Pension system beginning to crack

1978 The State Earnings-Related Pension Scheme (SERPS) was
introduced to provide a ‘top up’ to the state pension.
1980 Abolishment of the ‘earnings link’
1990s Scandals in management of occupational pensions let to
new regulations
2000s The closure of ‘defined benefit’ occupational pension
schemes accelerated,
2002 SERPS replaced with State Second Pension
2003 Introduction of Pension Credit


Retirement today

Between 1881
and 2008 the
economic
activity rates of
UK men aged
65+ fell from
74 per cent to
10 per cent.


Retirement today

 The average retirement age for
men is 64.5 years, and for women
62.4 years (ONS)
 Vast majority of people can expect
to live for at least twenty years in
retirement
 Today’s pensioners benefit from a
level of support from the state not
available to previous generations – http://www.flickr.com/photos/luc/6800884507/sizes/z/in/photo
stream/

with many in receipt also of
generous ‘defined benefit’
pensions from their employers.

Where are we now – The happy side

 Recent upwards trend in
effective retirement ages

 Staying in work for longer
has a positive well-being
effect for many people

 Improved health in later
life means we have more
opportunities to enjoy
leisure pursuits

But it’s not all positive

 Faltering growth and the end of generous pension
provision, may create a compulsion to work for longer
 Employment opportunities for older people appear to be
concentrated in low-quality positions
 Hierarchical workplace structures may have flattened, but
older workers complain of their particular skills and
experiences not being utilised and training not being
offered.
 ‘Age-blindness’, a result of our success in challenging
discrimination, is a positive development, but not if it
disables employers from offering age-appropriate support
to their older employees

An era of reform
2005 The Turner Commission: Work longer, poorer pensioners
or pay more. Proposals: Reduce ‘qualifying years’ for a
full basic state pension to 30; the introduction of
‘personal accounts’; increase in the SPA to 68 by 2046
2010 The government accelerated the increase in state
pension age. It will reach 66 by 2020. In 2011, the
government announced plans to increase state pension
to 67 by 2028, almost a decade sooner than Turner.
2011 The coalition government announced plans for a single-
tier state pension, abolishing the State Second Pension
and set at a level higher than Pension Credit guarantee
payments. Eligibility is likely to be based on residency
rather than contribution records.


Challenges ahead

 The increasing fiscal burden of an ageing society & the
possibility of intergenerational conflict as today’s taxpayers
are asked to fund the retirement of today’s retirees.
 Uncertainty over the nature and scale of social care funding
 Persistent disparity in life expectancy.
 The problem of isolation in ‘very old age’ due to the
breakdown of traditional families and neighbourhoods.
 Mobility and mental health problems associated with ‘very
old age’.
 The disruptive nature of technological development.
 The individualisation of the pensions system.

Citizenship in retirement

Citizenship implies that, in return
for recognising our duties such as
obeying the law and paying taxes,
we have certain entitlements.


Citizenship and pensions

 UK pensions system has moved
away from the notion of
citizenship, and towards
individualised provision
 BUT - Citizen’s Pension is an http://www.flickr.com/photos/nickatkins/5888232320/

attempt to overcome the
complexity in the relationship
between citizenship and
retirement, while establishing a
solid, universal state pension as
the basis for private saving


We have designed much of our public policy concerning older people
according to an image of life after 65 that is now redundant. The
old notion that after this milestone in your life, all you can expect
is decline and dependence is hopelessly outdated. We must
assume that older people will participate actively in society and in
the workplace for longer and to the best of their ability.

But the principal responsibility for retirement saving must rest with
the individual and not the state. The state can help support a
culture of saving through fiscal measures and by ensuring the
social security pension rewards rather than penalises savings. A
more generous state pension with relaxed contribution rules that
ensure more women receive an adequate income can help lay a
solid foundation for the pension reforms that are due to begin
next year. John Hutton 13th Feb 2012


What should we expect to contribute?

What kind of contributions
should people be making
in return for this support,
beyond paying taxes and,
presumably, National
Insurance contributions
during their working life?

http://www.flickr.com/photos/sammers05/3692360687/sizes/m/
in/photostream/


Rights and responsibilities: Employment

Older citizens have a
responsibility to remain in
the labour market, where
possible, to enable skills
retention and minimise fiscal
burdens on taxpayers.
Older people should have a right
to support from employers, http://www.flickr.com/photos/kheelcenter/5279905182/sizes/m/in/photos
tream/

and society more generally,
to enable longer working
lives.


Rights and responsibilities: Employment

 46 % would consider delaying retirement if their
employer offered support for reducing their hours, or
working more flexibly.
 41% of men and 39% of women would consider delaying
their retirement if they could defer their state pension
entitlement in return for higher payments later.
 43% of men and 41% of women would consider retiring
later if they could combine income from their existing
employer and an occupational pension.
 Only 2% of men and 3% of women said that nothing
would make them consider delaying retirement.


Rights and responsibilities: Volunteering

The idea of an obligation to
volunteer is contradictory. Many
older people are eager to
volunteer in later life as part of an
active retirement. Opportunities to
volunteer must therefore be
appropriate: flexible, fun, and
oriented towards utilising the skills
older people have developed
during their working life.


More time for volunteering?

 73 per cent of EU residents do not
undertake any formal voluntary
work.
 Half report they would volunteer
if they had the time.
 72.8 per cent of working-age
people plan to volunteer more in
retirement
 Fewer than a third (+55) report
that they would volunteer more if
they had more time.


Rights and responsibilities: Housing and
care
 Older people should have a right
to remain in their own home. It is
vital for the well-being of many
older care recipients

 But it is fair that older people draw
upon property wealth to help fund http://www.flickr.com/photos/thousandshipz/4
679235/sizes/m/in/photostream/

care costs


Citizenship at end of life

 Do older citizens, in an ageing society,
have a right to have their lives
prolonged for as long as possible
through intrusive medical
interventions – potentially at the
expense of treatments for people in http://www.flickr.com/photos/pentaxeric/3702092530/
sizes/o/in/photostream/

ill-health earlier in the life-course?
 There is no easy solution but the
emphasis, we argue, should be on
improving rather than prolonging life.


Conclusions

 Over 20 years we have gone from crisis
to crisis, slowly recognising that
longevity means we cant fund the
support in old age which we expect.
http://www.flickr.com/photos/dulcielee/6

 The crisis in care funding is emblematic 228005365/sizes/m/in/photostream/

of the fact that the scale and design of
formal welfare and support services for
older people has not kept pace with
increasing longevity.


 There is a role for Government. We need
national “retirement” strategies/policy
incorporating all Government activities, not
just DWP.
 We must all difficult questions
– “what is the point of retirement?”
– What are the rights and responsibilities for
old age?
– Can we debate rights and responsibilities
across the life-course?
 We must better recognise that retirement is a
http://www.flickr.com/photos/jamelah/16144383/siz
process rather than an event. es/m/in/photostream/


And we must move quicker on gradual
retirement
 ‘gradual retirement’ should
provide a potential solution to
the challenges facing
retirement.
 The financial incentive structure
must also be geared towards
encouraging gradual retirement.
 Employers must create and
support opportunities for
gradual retirement.


 We need to abandon the notion that people make
contributions in their working life in return for support in
retirement, that is, that retirement marks the point where
older people’s contributions are no longer necessary or
valuable.
 Continuing as a productive member of society in retirement
is both a responsibility and a right.
 We should expect older people to contribute to society in
return for support in retirement – but equally, many older
people are eager to contribute to society, and we need to
ensure opportunities to make meaningful contributions are
available.

Better Life

I am Richard and I am perfectly able-bodied thank you and
also of perfectly sound mind. What can I do for you?
The chances are I know more than you about most things. I
landed on Gold Beach on D-Day then worked as a
brewer.
It was a useful life. Defending the realm, than making beer.
Now I am waiting for my telephone to ring. It never does
ring.

Sir Andrew Motion (for the JRF)


Older Workers - trailer 1948


Many thanks

David Sinclair

Head of Policy and Research

International Longevity Centre

David.sinclair@ilcuk.org.uk

02073400440

Twitter: @ilcuk and @sinclairda


Changing the perceptions of
Retirement
Stephen Balchin
DWP


Changing Perceptions of Retirement

Stephen Balchin
Redefining Retirement Division
Department for Work and Pensions
Stephen.balchin@dwp.gsi.gov.uk

We‟re Living Longer Healthier Lives
Life Expectancy, and Healthy Life Expectancy at 65, ONS

25

20

15

10

5
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Female life expectancy Male life expectancy
Female healthy life expectancy, new basis Male healthy life expectancy, new basis
Female healthy life expectancy, old basis Male healthy life expectancy, old basis

1 in 4 children born
And life expectancy has been on the today can expect
to live to 100
increase since 1900
Cohort life expectancy at 65 (England and Wales) 1848 to 2060 – Years
30
Welfare state
introduced
25
State pension
introduced
20 In 1900 a 65 year
old would have
Lloyd George about 11 years of
15 pension life remaining,
barely changed
from 1850, by
10 2000 this had
risen to about 20
and is forecast to
5 reach about 26 by
2050
0
1848
1861
1874
1887
1900
1913
1926
1939
1952
1965
1978
1991
2004
2017
2030
2043
2056
Male Female
Source: ONS

So why does it sound like
there’s a problem?

Problem 1: Our conception of „old age‟ is out of date
• We base assessment of likely health on our parents and grandparents
• We have an – arbitrary - boundary of 60 or 65 as when we should retire
• State Pension Age is by far the strongest anchor to when we expect to retire

Source: What can we learn from Retirement Expectation Data, IFS

Problem 2: Baby boomers mean we haven‟t had to think
about this too much
Roughly 2
Old Age Dependency Ratio ‘working age’
to 1 over 65
70% 70%

60% 60%

50% 50%

40% 40%

30% 30%

20% 20%
Roughly 4
‘working age’ to
10% 10%
1 over 65
0% 0%
1941 1951 1961 1971 1981 1991 2001 2011 2021 2031 2041 2051

With baby boom With no baby boom

So despite longer lives we‟ve managed to work for less

Male average age of exit
from labour force Percentage of adult life spent in retirement

1950 67.2 35

30
1960 66.2
25
1970 65.4
20

1980 64.6
15

1990 63.5 10

1995 63.1 5

2000 63.3 0
1950 1960 1970 1980 1990 1995 2000 2004

2004 63.8

Problem 3: The „deal‟ with the state, and with wider family
networks continues to change

• Over the last 50 years state has taken
more then less responsibility for earnings
replacement as part of the pensions
system.
• Family provides less care provision
• New social networks are rarely based on
who lives next door.

Problem 4: We‟re not very good at planning
• Inertia – don‟t do now what you can put off to tomorrow
• We‟d prefer to have things – holidays, new TV, new car - now
• People avoid complexity and choose things they understand
• We‟re poor at understanding risk

Employees in a 401(k) pension scheme with and without automatic enrolment
100%

80%

60%

40%

20%

0%
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48
Tenure (months)

No automatic enrolment Automatic enrolment

And bad at planning impacts on more than finances,
Are you planning to stay healthy into old age?

• …contradicts the common observation that
muscle mass and strength decline as a
function of aging alone.

• … declines may signal the effect of chronic
disuse rather than muscle aging.

• … maintenance of muscle mass and
strength may decrease or eliminate the falls,
functional decline, and loss of
independence that are commonly seen in
aging adults.

Many caveats

Chronic Exercise Preserves Lean Muscle Mass in
Masters Athletes
Andrew P. Wroblewski, MBS, BS; Francesca
Amati, MD, PhD; Mark A. Smiley, MBA, BS; Bret
Goodpaster, PhD; and Vonda Wright, MD, MS

Problem 5: changing health needs

Better medicine means:
• People survive with conditions which we‟re previously fatal.
• We can continue to function with conditions that used to be debilitating.

Better technology also means there‟s more treatments out there – so more of a
challenge to prioritise.

Some things are already changing: work and pensions

Average Age of Leaving the Labour Market
• People are working longer
65
Men • The Default Retirement Age is
64
Women gone
• State Pension Age increasing
63
• Private Pension provision is
62 heading to a world with many
more Defined Contribution
61 benefits and less Final Salary
schemes.
60
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 • Auto-enrolment into occupational
pensions starts this year

But what next?

Could be..

Employers:
• More 50 year olds doing apprenticeships
• Flexible working, and movement between types of jobs
• Different approaches to sharing expertise

(Big) society:
• Care banks
• Local networks
• Intergenerational work (volunteering in schools)

Individuals:
• Individuals challenging assumptions that age should be important
• More responsibility or opportunity for the life they want

Changing the perception of
retirement

Daniel Ryan
Swiss Re


Changing the perception of
retirement
Daniel Ryan
Head Research & Development, Life & Health
1 March 2012

Global ageing populations
Shared perils and promises

Daniel Ryan | Changing the perception of retirement | 1 March 2012 73

Rapid growth expected for the oldest old

Source: Department of Work & Pensions, 2011


Trends in pensionable ages

Source: Pensions at a glance 2011, OECD


Retirement villages
York, UK

Source: Hartrigg Oaks, Joseph Rowntree Foundation


Retirement villages
Perth, Australia

Source: Ocean Garden's Retirement Village, Perth, Australia. www..oceangardens.com.au and iStockphoto/Georgy Markov


But we are not saving enough for this long retirement
The average annual amount individuals would have to save in order to achieve a
retirement income of 70% of salary (selected countries), EUR
14 000

12 000

10 000

8 000

6 000

4 000

2 000

0
United Germany Ireland France Spain Czech Poland Italy Turkey Hungary
Kingdom Republic
Source: Aviva, 2010


Italy: The Manzo family of Sicily
Food expenditure for one week: 214.36 Euros or $260.11

Germany: The Melander family of Bargteheide
Food expenditure for one week: 375.39 Euros or $500.07

United States: The Revis family of North Carolina
Food expenditure for one week $341.98

Obesity trends in US adults
1990

Source: CDC

No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

2000

Source: CDC

No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

2010

Source: CDC

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%


Old age eroding our physical capabilities
 Hand grip strength reduces by 45% by age 75
 Blood flow to brain reduces by 15-20% by age 70
 Sense of smell reduces to 50% of peak by age 80
 Maximum heart rate reduces by 15-20% by age 70
 Blood pressure of 50% population at age 65 is mild or worse hypertension
 Maximum breath capacity reduces by 40% by age 80
 Dementia affects 10% of those over age 65; 20% of those over age 85

© 2010 The Actuarial Profession  www.actuaries.org.uk

Understanding the challenges of old age

Source: The Koken Aged Simulation Set


Longer lives – implications for healthcare
Survivors and deceased in regional study in Italy

Source: AHEAD, European Network of Economic Policy Research Institutes (2007)


Teaching Geriatric in Medical Education study

 Collaborative study of WHO and International Federation of
Medical Students' Associations
 WHO intends healthy/active ageing and promotion of long
term health to form education of all future young doctors
 Promotion of life course in graduate training and later
 41% of medical school curricula refer explicitly to geriatrics
 GERIND index calculated by medical school and averaged
across country –separation of geriatrics teaching and quality of
ageing science being taught
 Central hypothesis is that countries with higher percentage of
older persons are more likely to have separate high-quality
teaching on geriatric medicine – not always true

TeGeMe – GERIND index vs. age of population

Source: World Health Organisation


Putting individuals at the centre of healthcare

 Health systems must evolve in response to the ageing of society to
optimise health across the full life course
 Greater emphasis on prevention and public health
 Moving from hospital, acute care and institutional care to
community-based care
 Shared responsibilities increase effectiveness and efficiency:
individuals to be partners in own care
 A co-ordinated continuum of care centred on patient, often with
multiple diseases
 Our target must be compression rather than expansion of morbidity

Source: WEF 2012: Global Aging: Peril or Promise?


A final word of thanks
to our sponsors in retirement


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Although all the information used was taken from reliable sources, Swiss Re
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any damage resulting from the use of the information contained in this
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relating to this presentation.


Changing the Perception
of Retirement
1 March2012


ILC-UK and the Actuarial Profession debate: Changing the perception of retirement. Supported by Swiss Re

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