Working in your 60s: a way to stay young for some

In order to contain the growth of state pension spending in the face of an ageing population, successive governments have increased the state pension age – the age at which people can first claim their state pension. After equalising the male and female state pension ages at 65, the state pension age for both men and women increased to 66 between 2018 and 2020. From April next year, it will rise again from 66 to 67. 

One consequence of increasing the state pension age is that some people choose to, or need to, stay in paid work for longer. The effects of this longer working at older ages is an important and controversial issue for policy. Do the strains of work run down people’s health or is working a beneficial source of mental and physical stimulation that staves off the ageing process? 

Research by IFS authors, newly published in the scientific journal Labour Economics, examined the effects of the extended working lives of women that resulted from the big increases in the female state pension age in the 2010s. Before 2010, all women had a state pension age of 60. Between 2010 and 2018, the female state pension age gradually increased until it reached age 65. We estimate that around 1 in 10 women who were affected by the rise in their state pension age responded by remaining in paid work for longer. 

We quantified the effect of this longer working on cognitive function and physical disability. Those outcomes were chosen because they might plausibly be affected relatively quickly by the stopping (or continuing) of work and we were limited to examining the period immediately around the reform. We estimated the effects of working by comparing women who were otherwise similar but, due to having slightly different dates of birth, faced different state pension ages and therefore undertook different amounts of paid work, on average. 

We found that being in paid work is good for the cognitive functioning of women in their early 60s, on average. Cognition is measured by performance on tests including a memory test. The positive effects were seen across those undertaking different types of work (from managerial to routine work) and were driven primarily by improvements in cognitive functioning for single women. This suggests that it is those who live alone, who are more likely to see a drop in social interactions upon retirement, who gained the most from the stimulation of work, and that these benefits are not confined to jobs typically seen as cognitively demanding. 

For women in their early 60s, we also found that being in paid work helps prevent the onset of physical disability, on average. We measured physical disability through a number of questions reporting ability or inability to do certain daily tasks and through performance in a walking speed test. Staying in paid work, rather than retiring, caused a lower level of reported physical disability and faster walking speed. The effects varied significantly by the type of work undertaken. For those in jobs with some physical activity, work had a positive effect. However, for the quarter of women working in sedentary jobs that did not involve a lot of movement, working worsened physical disability. We found that work caused women in sedentary jobs to do less physical exercise, whereas those working in non-sedentary jobs did more exercise as a result of being in work, consistent with the latter type of paid work promoting increased levels of activity and therefore physical health.

Our study complements existing evidence from other settings that has shown benefits of working for cognitive function and mixed results on a range of other outcomes depending on the group being considered. Our study is not a comprehensive assessment of the effects of working at older ages. We were limited to examining the short-run effects of extended working lives; the effects of work on cognition and physical disability could change when looking over longer time horizons. In addition, there are other aspects of health such as disease and mortality which develop more slowly that could also be affected differently by working at older ages. And, of course, the majority of individuals do not respond to a rise in their state pension age by remaining in paid work for longer; they will be financially worse off as a result of the reform and this could have consequences for their health and well-being. As the state pension age continues to rise and lead to further increases in levels of paid work in people’s late 60s, and affects men as well as women, it will be important to track the effects this has.

These results mean that longer working has the potential to be positive for at least some health outcomes. However, the effects depend importantly on the type of work being undertaken and the activities and environment of people’s retirement. Policymakers should therefore consider encouraging social interaction and physical exercise in retirement. Our research suggests that this would have positive effects on maintaining cognitive function and physical mobility through older ages.