International Longevity Centre - UK

blog | website

a think-tank impacting policy on longevity, ageing and population change

Archive for December, 2006

Risks of polarity…

Friday, December 8th, 2006

This week’s On Management column in the FT saw Stefan Stern draw attention to the growth and plight of our ageing workforce (‘Don’t get fooled again - you’re not too old for the job’). He encourages us all to address this issue, saying: “It’s not just Actuaries and pensions advisers who have had their expectations confounded by increased longevity. All of us are having to reassess our views on age.” 

“Businesses need to get much smarter about age, and fast. The demographics insist on it. And it is no use expecting government to sort out these problems for you. In any case legislation has, so far, not proved terribly effective in bringing about what you call cultural re-education in this area.”  

Stern cites me and an argument I made at a recent public debate on these issues, where I said that in failing to make better connections between generations whether at work or in the wider community, we risk polarising young and old, almost setting them up in opposition to each other, just at a time when we need to think harder about the financial implications of our ageing society. 

Indeed, unless the combination of innovation, energy, skills and experience is maximised one can’t help but see this potential conflict. This conflict is between the ‘golden generation’ who have been investing in their homes and benefiting from good final-salary pensions, the ‘baby boomers’ who are buying property instead of saving and the younger generation who are getting into serious debt.  Current elders have had the attitude of saving to benefit their children but now these savings are increasingly needed for their parent’s living expenses, leisure time and, more urgently, paying for long term care.   Recognising a potential for conflict between the generations, the sooner there can be intergenerational approaches to these problems in communities and the workplace, the better society will be. We need a more positive attitude to increased longevity, more effort to grasp ageing as an opportunity, and to challenge the prejudices that exist, so as to avoid wasting the experience and talents of both young and old working together.   

Noreen Siba

A long way to go…

Wednesday, December 6th, 2006

We were delighted yesterday to have Professor Phil Taylor, a friend and close associate of the ILC-UK, present some findings from a study he lead into policies facilitating working in later life.  The study, based at the Dublin’s European Foundation for the Improvement of Living and Working Conditions, looked at measures enacted in 120 organisations to improve the employment situation of older workers.

 

Unsurprisingly, there are a host of facts that back up the need for these kind of initiatives: e.g. there are 1 million people aged over state pension age in paid employment in the EU, and yet, apparently, 10% of companies do not employ anyone over 50. In the healthcare workforce, large proportions of workers are approaching later life, for example, 1 nurse in 5 is over 50 in the UK. In France, only 23% of physicians are under 40. Will we be able to keep these workers engaged, or will we see large groups of professionals retiring en masse leaving health and social care high and dry? 

Phil’s work was particularly interesting as the study revisited participants in an earlier survey, allowing researchers to see how initiatives to improve working life for older employees had faired. I was most immediately struck by his candid appraisal of the status of older workers. Despite a few key best practice examples, and despite the much-awaited policy framework of anti-discrimination legislation, such schemes were often dropped the moment a company hit financial difficulties, often whilst the hot air was still pouring forth. Moral of the story? When times are good, social responsibility is a nice add-on. When times are bad, it’s a quick about turn and a revert-to-type early retirement initiative is wheeled out. Even in countries where legislation has arrived before the UK (we are running a few years late) actual cases of successful prosecution were rare and payouts desultory.  We certainly have a long way to go, a point underlined by the April 2006 announcement that Ericsson was seeking 1,500 voluntary redundancies from workers aged 35-50 to make way for younger employees. The reason? To ‘ensure competitiveness’ and ‘rebalance’ the workforce. 

In the midst of all this, there are of course some excellent best practice examples of course. When committed employees created thoughtful and long-lasting schemes, benefits to employers were found to include greater staff commitment, a reduction in sickness and absence rates, reduced labour costs and greater productivity, reduced conflict and better teamworking, and unsurprisingly, reduced pension costs from later retirement.  For older workers, these schemes tended to bring better health, self-esteem and wellbeing, opportunities for learning new skills, increased motivation and better pensions.  Yet it was also apparent that a great deal of confusion surrounds these issues. In many instances, trade unions and workers groups had opposed these measures to facilitate working life and reduce early retirement, no doubt believing that working later was to be ‘cheated’, a particularly common philosophy in continental Europe. This brought home something that had been puzzling me already on the issue: when I am 50, what will I want? Will I want to retire, or keep working? I like to think I will be in some form of rewarding employment, but what if I’m not? Some studies have pointed to a link between early retirement and worsened health outcomes. Hopefully I will be able to work because I want to, but if it is driven by financial necessity, will suitable jobs be there for me?  

Ed Harding

The Dilemma of Winter Fuel Payments

Wednesday, December 6th, 2006

If someone gave you £200 just before Christmas, what would you do with it? If you’re a pensioner, the Government believes you would spend it on heating your home. We saw this again today in the Chancellor’s Pre-Budget Report, which included: “the continuation of Winter Fuel Payments of £200 for households with someone aged 60 or over, rising to £300 for households with someone aged 80 or over, for the duration of this Parliament.”  Winter Fuel Payments are the Government’s response to the continuing problem of Wintertime death and illness among older people. According to Help the Aged, last Winter, more than 25,000 people over the age of 65 died as a result of cold related illnesses.   

This is shocking, and is the reason for the enormous campaign from charities and NGOs, which resulted in Winter Fuel Payments.  However, there’s a problem here. When the payments arrive, many older people won’t spend it on heating. Some older people simply don’t need the extra help and treat the Payment as an excuse for indulging in a few luxuries. But even those who do suffer from the cold will sometimes opt to spend the money on gifts for the grandchildren, an extra bottle of sherry for Boxing Day, or whatever else they choose.    There’s research which elaborates the problem. Professor Ian Walker of the economics department at Warwick University published a paper entitled “Cold Comfort: The Effect of Winter Fuel Payments”. You can access the briefing here:  http://www2.warwick.ac.uk/about/warwickmagazine08/coldcomfort/    

Professor Walker’s research found that that the most optimistic average increase in pensioner fuel spending as a result of receiving the Winter Fuel Allowances, was only between £3 to £6 of the additional £100 - £300. What does this mean? Well, as difficult as this might be for campaigners who pressed for the Winter Fuel Allowance, it is actually too blunt a tool for the job. Human behaviour is complex, and some older people might suffer the cold in order to save money on what they believe is more valuable or important. And of course, older people won’t just get cold sitting in their homes. How do you ensure people wrap up? Is a Winter Clothing Allowance required?  As Professor Walker has argued, his research suggests that whether fuel spending matters for older people depends on whether cold homes affect health. The challenge of “excess deaths” that occurs each winter remains a major policy challenge. What is needed is more research into what causes cold-related illness or death, and more innovative policies for persuading older people to put the heating on.

James Lloyd