Simplicity, security and choice: Work and saving for retirement Background General

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1 27 March Donald Hirsch Simplicity, security and choice: Work and saving for retirement Response to Green paper by Joseph Rowntree Foundation, March 2003 Background The Joseph Rowntree Foundation is completing a programme of commissioned research on Transitions after fifty. The findings from this research have a very direct bearing on the issues raised in the Green Paper most especially in the themes of Chapter 6. The programme seeks to explore the experiences and attitudes of people in and around the time of transition out of work, particularly in relation to the issue of leaving work before state pension age. Its three main themes relate to experiences in the labour market, people s experiences outside paid work and the income dimension. The programme has a particular concern with people in lower income groups. The findings of seven published studies are appended to this submission, in brief, one-page summary form (Annex 1). One forthcoming study, on early retirement and financial transition, is providing some particularly rich evidence on different pathways that people are experiencing. The study by Sue Arthur at the National Centre for Social Research is due for publication in the autumn. General The Foundation s research findings support the Green Paper s view that people in the United Kingdom need greater simplicity, security and choice when planning for retirement. Our recent research in this area has not looked comprehensively at retirement and pension issues, but rather focused on the relatively unresearched situation of people leaving the workforce early. For these people, especially those who are worst off, the biggest missing factor of the three in the Green Paper s title is choice. Our programme has not concluded that the most serious problem is people taking ill-informed decisions, but rather people having a lack of options that allow them to achieve their goals in later life. The inclusion in a policy report on pensions and retirement of a chapter on extending opportunities for older workers is a very welcome development of joined up government thinking. Our studies have confirmed that what happens to people in work, including the context in which they leave it, is a key influence on well-being, or otherwise, in retirement. On the other hand, the Green Paper at various points (eg the first sentence of chapter 6) appears to suggest that lengthening working life, rather than giving people the chance to work longer if they choose, is the defining objective of government in this field. We would suggest caution in this respect.

2 We accept that, for the economy as a whole, it is desirable to reverse the long-term decline in participation rates of older men. Much of our evidence confirms that many people leave work early because they feel negatively about their jobs or because they have no choice, indicating that improved work opportunities are likely to produce willing participation by many who presently stop working. However, an approach aimed at extending working life per se could have unfortunate implications. Many who at present willingly leave work early, whether because they are looking forward to retirement, are suffering ill health or need to care for a family member, would understandably resent being told that working longer is good for them. This is not to deny that the financial choices available to individuals leaving work early should become clearer, or that financial incentives should take account of the cost to society of such decisions. However, an important finding from the JRF s programme is that money is not typically the driving factor in people s decision-making in relation to leaving work (this is discussed in more detail below). In conclusion, it may be worth considering what an ideal pattern of older people s employment would look like, say ten years from now. Our evidence points first and foremost to the diversity of people s characteristics and preferences in this age-range, rather than to a single pattern of people wanting to work longer or shorter. The removal of age discrimination and an enhancement of opportunities for older workers could therefore be expected to create a more diverse pattern of retirement and work exit, rather than simply encouraging everyone to work longer. More people who enjoy their jobs may work beyond retirement age, some into their 70s. Some would use bridge jobs to wind down gradually from career jobs. An environment more friendly to older workers would cause more of them to feel positively about their jobs, with fewer leaving for negative reasons. Greater support for older workers and their needs (including eg reduced hours and flexibility that enables them to carry out unpaid care) would help to retain older staff. Yet at the same time, many people would still welcome the chance to retire in their 50s. For some, this will be a quality of life issue, and in many cases they would consciously be trading money for leisure. For others, such decisions would be driven by their own health or those of other members of their family. Where such needs clearly exist, one would need to be careful that the pensions system did not excessively punish people for leaving work early, by introducing incentives to remain in work for people who do not feel they really have a choice of doing so. JRF evidence, relating to specific parts of the Green Paper Chapter 2, paragraphs 47-49: What income might individuals want in retirement? The replacement rates referred to are averages. Commentators tend to agree that lower

3 replacement rates are needed for people with higher initial incomes, and this is quite obviously the case in terms of keeping people out of poverty. One study (Arthur, 2003) found that, among people before State Pension Age who had left work, while more affluent groups tended to find roughly half their earnings satisfactory, the actual replacement rate for the poorest groups (earning under 11,000 a year) was closer to 100% (once benefits such as housing benefit and council tax benefit were taken into account). For this latter group, poverty in retirement was simply a continuation of lifetime poverty. It was the next group up (earning 11,000-20,000 a year in work) that tended to suffer the most in terms of living standards not meeting previous expectations as a result of unplanned early exit from work. An important implication is that financial security in retirement cannot be divorced from people s financial situation throughout their working lives. A study on later-life income and work history by Bardasi and Jenkins (2002) showed clearly that what kind of job you have is far more important to the risk of low late-life income than how many years you work or at what age you retire (although the latter does have some correlation with low-income later in life, for men in some occupational groups). One needs therefore to be cautious about setting a single target replacement rate. Chapter 3, Informed choice, and particularly Section 3.5: Financial education and awareness There is clearly a need for people to make decisions about retirement on the basis of good information and understanding of one s financial position and options. Any initiatives that improve the flow of information, such as automatic state pension forecasts are therefore particularly welcome. At a wider level, however, it appears that a significant problem is that however much information is around, many people find it hard to frame their decisions within a rational framework of long-term financial planning. Thus, long-term strategies for improving financial education would do well to concentrate on broad principles that help people to think about their financial futures (eg how to make decisions in a world of risk and uncertainty) rather than on detailed specifics of the financial system. JRF s soon to be published report on early retirement and financial transitions (Arthur, 2003) provides some interesting evidence in this respect. In this qualitative study, respondents reported the following aspects of financial awareness and planning: Those retiring early onto a private pension tended to say that they had a good, or even very precise, idea before leaving work of how much they would be going to receive from that pension; People found it much harder to know in advance what their state pension would be; In general, knowledge of likely income in the short term was good, but longer term planning was found more difficult because of uncertainties about future finances and

4 future needs; People did not always take financial advice at the point of leaving work, or indeed any stage of their lives. Where they did, a main source of advice was through companysponsored early retirement packages. However, financial advice did not appear to be the main influence on people s decisions; Some people did not plan financially at all for retirement during their lives, typically because they have never felt able to save or buy pensions; Others not planning actively included better-off people who relied on their occupational pensions and did not feel a need to save; On the whole, married women had not planned for their retirement in their own right, except where they had an occupational pension scheme as an automatic part of their job: where they had a choice in planning their financial future, they had tended to think that relying on a husband s scheme was preferable Those who did consciously plan ahead financially during their working life tended to do so in a broad brush way, putting money aside where they could spare it rather than having a specific plan about when to retire. An exception was in setting a mortgage term, where some provisional assumption needs to be made. Thus it would be simplistic to think of everyone who thinks about retirement as financially ignorant and short-sighted. More specifically, people can find it hard to think about whether they will have enough over the long term, and therefore focus on short-term specifics or not plan at all. Measures that can increase people s capacity to make decisions likely to provide adequate incomes or capital for themselves further ahead would therefore be welcome. Moreover, this research confirms earlier evidence of a divide in the degree to which people on different incomes are able to plan ahead. A JRF report on planning for the future (Rowlinson, 2000) found that for worse-off groups, even if those both willing and able to think and plan ahead, the capacity to do so was often limited by economic insecurity and lack of resources. Those with secure (and high) incomes felt they were more able to plan ahead. Improving the degree to which people plan therefore relies on a twin strategy of better financial education and know-how on the one hand and improved economic circumstances and choices on the other. Chapter 5, paragraphs property and equity release The Joseph Rowntree Foundation has taken an interest in these issues, especially in relation to poorer home owners having sufficient funds to maintain their homes in good condition during retirement. A particular concern about the regulatory regime is the extra administrative costs it imposes on products to which it applies. This makes it particularly difficult for people of more modest means to raise small sums against their homes, since the fixed costs are too high relative to the amounts being raised. The desire to create a level playing field is

5 welcome, but at the same time it would be important to consider mechanisms for helping to cover the extra costs involved potentially through public subsidies to defray these costs for lower income households. This is a way of using a relatively small amount of public resources to unlock private capital held by lower income groups. The Foundation is planning new research on attitudes to inheritance and to the use of assets in later life that will help test the extent of the potential role that equity release can play in the years ahead, to enhance people s living standards in retirement. Chapter 6: Extending opportunities for older workers The general section above sets out why the desire to extent opportunities for older workers is highly desirable, but argues that policies to this end need to be framed in terms of better choices rather than extending the working life. The Joseph Rowntree Foundation s Transitions After Fifty Programme has shed light on the actual circumstances and decisions experienced by people leaving work early: Many people have little or no choice or control over when they leave work. In particular, those who have weaker employment backgrounds, and who are therefore at greater risk of low income in retirement, most often experience limited choice and control. These tendencies have been hypothesised by commentators over several years, eg in the Cabinet Office report Winning the Generation Game (2000), but with limited concrete evidence. However, recent analysis of the Labour Force Survey by Lissenburgh and Smeaton (2003) confirms that more advantaged groups over 50 tend to move out of employment for more positive reasons (eg good financial position) and more disadvantaged groups for more negative ones (eg health problems and lack of choice. A richer depiction of these patterns emerges from the qualitative research in forthcoming research by Arthur (2003). The dimensions developed in the findings of this study offer useful ways of addressing the complexity of the different circumstances and pathways experienced in early job exit. Where people do have some choice about whether to leave work, they are commonly influenced by a combination of factors - including job satisfaction, personal health, financial circumstances and family circumstances rather than a single factor (Mooney and Statham 2002; Barnes et al, 2002; Arthur, 2003). Personal factors, including in particular the individual s own health, figure prominently in these motives (Mooney and Statham 2002; Barnes et al, 2002; Arthur, 2003). In some respects, this limits what governments and employers can do to help older groups to work. Thus in helping to improve work opportunities and incentives for some, policy also needs to take into account the fact that they will not be applicable to everyone. For example the proposed attempts to do more to help older people on

6 Incapacity Benefit to work, while welcome, will realistically only succeed for a minority of those claimants. Equally, however, there will in some cases be scope for addressing personal circumstances, especially for people still in work. Two examples identified in the research are support for people who are both working and caring (Mooney and Statham and see comment on Chapter 7 below) and greater attention paid to occupational health, which has been a strong priority in Finland s strategy for reorienting the working world around a changed demographic profile (Taylor 2002). The importance, in the long term, of creating new work cultures that are more healthpromoting for older workers was underlined by Barnes et al (2002) who found that a number of early-retired people had health problems directly arising from employment, such as personal injuries and workplace stress. Qualitative evidence suggests that financial factors may not in most cases be the dominant factor in decisions about moving away from paid work (Arthur, 2003). Money is seen more as a means to an end, or a constraint that determines whether people find leaving work affordable. This should lead policy makers to be cautious about the use of financial incentives to improve employment rates. It is possible that the only way in which these could influence people s behaviour greatly through financial mechanisms is by creating a stick against those who leave employment (ie make retirement less affordable) rather than a carrot for those who remain (ie make working more financially attractive). The difficulty about that is that the stick affects those who have little or no choice as well as those who do. Thus without other mechanisms to make work more attractive (something that older people want to do, not just something that they have to do to make ends meet), an incentive-oriented policy could either be ineffective or cause hardship. Women s and men s experiences differ see comment on Chapter 7 below. Age discrimination paragraphs The Foundation s research on policies in other countries (Hornstein 2001; Taylor 2002) has shown that age discrimination legislation can play a useful role in improving opportunities for older workers. Some direct effect on employment rates have been demonstrated in the United States. Perhaps more important is the overall signal that is sent that age should not be used in a discriminatory manner in assessing someone s suitability for employment. Where age discrimination legislation has outlawed compulsory retirement ages, the initial results have not been obviously strong in either negative or positive terms. On the one hand they have not reduced greatly employers ability to manage their workforce or to dismiss incompetent employees; on the other, there has been no immediate gains to older people s employment. Impacts are therefore likely to be over the longer term, and in combination with other policy outcomes.

7 Flexible retirement paragraphs More flexible options for retirement are an important aspect of improving opportunities for older workers, especially in light of changing personal circumstances and the need in some cases to balance work and other aspects of life. Occupational pension rules that allow greater flexibility are therefore greatly welcome. A recent JRF report (Lissenburgh and Smeaton, 2003) has specifically considered the extent to which older people use non-standard forms of employment (temporary, part-time, selfemployment) following departure from a career job. A substantial minority (44%) of people over 50 who move out of permanent full-time employment during a given 12-month period are in bridge jobs rather than out of work at the end of that period. However, there is differential access to these jobs, by type and quality, among different groups. For example: Higher-paid men and those with good qualifications and recent training experience are more likely to access part-time jobs and self-employment following departure from a full-time job although this is not true of women. Women with higher degrees are more likely to access temporary employment, rather than leaving the workforce completely. Self-employment for these groups on the whole offers job quality comparable to career employment, but temporary jobs less so, and part-time jobs least so. In particular, these latter two forms tend to be unstable. Women are more likely to move from permanent to flexible employment for positive reasons, but also more likely to find that the quality of these jobs do not match up. These findings show that while the change in occupational pension rules is a useful first step to promoting bridge employment, their success in improving the transition will depend on enabling a wider range of people to access such jobs, particularly where they are of good quality. Self-employment is a particularly promising option offering the scope for control and job satisfaction, but is also the option that most requires the individual worker to take on new roles. There is therefore considerable scope for orienting learning opportunities for older workers around the building of skills associated with successful management of selfemployment. Chapter 7 women, work and pensions In many respects, JRF s research has shown that women s situation is not the same as men s in respect to retirement and to early departure from the workforce. This is an area where women still often feel like an appendage to their partners they typically rely primarily on the man s entitlements for a retirement income. Equally, women can sometimes regret this overdependence in retrospect (Arthur 2003). Specifically, the following significant gender

8 differences were among those noted by the research: For women, early exit from the labour force is not (unlike for men in some educational groups) associated with sizeable differences in the probability of having a low income after age 60 (Bardasi and Jenkins, 2002). Rather, women s risk of low income in later life is more closely connected with their household type and marital status: women living without a partner are far more at risk, particularly those who are divorced. People who have a disjointed work history have very different pathways out of the labour market compared to those in permanent full-time jobs they tend to drift away from work rather than facing a major decision point (Arthur 2003). Women are particularly likely to be in this group. Those women who do leave permanent full-time jobs are more likely to find part-time or temporary employment to see them through to retirement, but are also more likely to end up doing work that is of poor quality in terms of things such as pay, job satisfaction, training opportunities and stability. These findings point to the need for particular policies to address the needs of older women: measures aimed primarily stemming the flow of early exit from work and giving opportunities for re-entry most relevant for men. The Green Paper s identification of women s need for to build up better pension entitlements in their own right and for better pay are both important. The research shows that there is a very long way to go in both respects. In particular, in the case of pension contributions, there is a need for a new mind-set in terms of women s need to provide for themselves directly rather than relying on their partners. In addition, the quality of work aspired to by women, especially later in life, is a significant issue. There may be particular value in measures giving older women greater access to training and education, for example to improve their skills in relation to self-employment. Thus older worker training should not just be seen in terms of reskilling redundant male manual workers. Helping parents balance work and family life paragraphs A striking omission from this chapter, which relates to this particular section, is the need to extend the concept of work-life balance beyond the context of parenthood. In particular, a very high proportion of women and men in their 50s, inside and outside paid work, have caring responsibilities for elderly relations, grandchildren and others who are not their dependent children. Mooney and Statham (2002) have undertaken a powerful survey of these carers, summarised in Annex 1. Perhaps their most striking finding was that, rather than pulling large numbers of people out of the labour market, caring responsibilities are often combined with paid work, creating severe strains on carers. These pressures are likely to grow, and it is risky for society to take the unpaid labour represented for caring for granted, given the huge contribution that it makes. A key issue for work-life balance in the years ahead will therefore be how working carers are able to juggle work, care and their personal lives. They would

9 certainly benefit from more generous financial support, together with a greater understanding of their needs from their employers. There has in recent years been considerable progress in adapting the working world to the needs of working parents, and in particular in creating greater understanding among employers and colleagues. The government could now take a lead in extending this ethos to the needs of older workers, particularly those with unpaid caring responsibilities. References All of the following references are publications summarised in the annexe below. All except Rowlinson (2000) result from the Joseph Rowntree Foundation s Transitions after Fifty programme and are published by The Policy Press, Bristol, in collaboration with JRF. Bardasi, E and Jenkins, S. (2001) Income in later life Work history matters Barnes, H, et al (2002) Forging a new future The experiences and expectations of people leaving paid work over 50 Hornstein, Z, et al, (2001) Outlawing age discrimination Foreign lessons, UK choices Lissenburgh, S and Smeaton, D (2003) Employment Transitions of older workers The role of flexible employment in maintaining labour market participation and promoting job quality Mooney, A and Statham, J, (2002) The Pivot Generation Informal care and work after fifty Rowlinson, K, (2000) Fate, hope and insecurity: Future orientation and forward planning Taylor, P (2002), New Policies for older workers Annex 1 Published reports: One-page summaries of Findings (Full four-page versions are available by clicking on the links following each summary) BARDASI AND JENKINS April Ref 482 Work history and income in later life As working lives shorten and retirement lengthens, there is concern over whether individuals make adequate provision to avoid poverty in old age. A study by Elena Bardasi and Stephen P. Jenkins of the Institute for Social and Economic Research

10 examined the relationship between the risk of having a low income in later life and people's lifetime employment history. The study, based on data from the British Household Panel Survey (BHPS), found that: Although employment rates of older men fell sharply in the 1980s, they stabilised during the 1990s. Older women's employment rates increased during the 1990s. In the period immediately before retirement, people start to work less and earn less on average, but income still falls sharply in the year of retirement. Spending more years in paid work in total between the ages of 20 and 60 did not necessarily lower the risk of having a low income when aged 60+. Instead, the effect depended on the occupational group involved. A reduction in low-income risk was associated with more years of paid work for men in professional, and personal and protective services occupations, and for women in managerial, professional, technical and clerical occupations. Holding the number of years spent in an occupation constant, the risk of having a low income when aged 60+ varied according to occupational group. For men, those groups with small low-income risks were professional and clerical occupations, whereas, for women, they were professional, clerical and managerial occupations. Working fewer than five years between the ages of 50 and 60 raised the chance of having a low income in later life for men who had spent more of their working life in clerical, craft, personal and protective services, and sales occupations. By contrast, for women, low labour market participation between the ages of 50 and 60 had little association with the risk of having a low income when aged 60+. Household type and marital status were more important determinants of low income in later life for women than for men. Women aged 60+ living without a partner had a substantially higher risk of low income than women aged 60+ living with a partner, even if they had worked for much of their life. Read the full Findings here. BARNES, PARRY AND LAKEY October Ref 022 Experiences and expectations of people leaving paid work after 50 Increasing numbers of people are leaving employment before standard retirement ages, through a combination of factors such as choice, redundancy, health difficulties and increased care commitments. A new study by Helen Barnes, Jane Parry and Jane Lakey of the Policy Studies Institute examines the experiences of people in their fifties and sixties who have left paid work. The research looked at how people came to leave their jobs, how they had adjusted to life outside the labour market, and how they were spending their time in retirement. The study found that: Most of those interviewed continued to make identifiable contributions to society after leaving paid work. Activities included voluntary work, learning activities, domestic work, caring for family members (including elderly relatives and grandchildren), helping out

11 friends and neighbours, and leisure pursuits People's health, income and family circumstances were important in how they spent their time in retirement. Those who were better off found it easier to achieve a high level of participation. The ways in which people came to leave work were important in how well they adjusted to retirement. Those who freely chose to retire tended to have higher levels of income and more options open to them. Getting involved in activities outside the labour market had many benefits, including personal fulfilment, a sense of purpose, continued sociability and keeping physically and mentally alert The older people interviewed felt that society should recognise their lifelong economic contributions. They were happy to continue to contribute, but felt that they should have more choice at this stage of their life about how they spent their time. In terms of policy implications, employment issues identified included the need for equality in retirement ages for men and women, and the abolition of compulsory retirement ages for those who want to continue working. The importance of a decent retirement income was also highlighted. The benefit system was seen as a key area for reform, including more proactive advice and information. Read the full Findings here. HORNSTEIN ET AL: July Ref 711 Age discrimination legislation: choices for the UK The United Kingdom has committed itself to legislate against age discrimination in employment for the first time, by signing up to a recent European Commission Directive. A number of other countries already have such legislation. This study looked at what can be learned from those countries' experiences and analysed the options for the UK in designing age discrimination laws. The study identified legislation against age discrimination in employment in 13 countries, and looked in detail at three (Australia, Canada and the United States) where it has been established for some time. It found: Evidence of the overall effect of such legislation is in most cases weak. However: - Legislation has had a positive effect on employment rates of older workers in the United States. This is mostly due to them leaving jobs at a later age, rather than to more of them being hired. - Employer behaviour has changed in countries with legislation, to the extent that explicit discrimination, especially in recruitment, has reduced. However, society's and employers' attitudes to older workers do not yet appear to have shifted as much as towards groups such as women and people from minority ethnic communities, where legislative protection has, generally, operated for longer.

12 - Forbidding employers to set mandatory retirement ages may have made them a bit less likely to hire older workers, but there is no evidence that this has been a major disincentive The international experience points to the importance of some key choices about how to design legislation in the UK. In particular, legislators must decide: - Whether to deal with both age and other forms of discrimination in a single law and agency. To do so would show that age discrimination is viewed seriously, but age also risks taking a 'back seat' in a single agency. - What powers to vest in the commission that will enforce the legislation: in particular, whether to give it proactive powers of investigation and regulation. - Whether to permit employers to set mandatory retirement ages. - What to exempt from the legislation. Human rights considerations must be balanced with economic efficiency and other objectives; but too many exemptions tend to discredit anti-discrimination laws. Read the full Findings here. LISSENBURGH AND SMEATON, March Ref 343 The role of flexible employment for older workers Some of the increasing number of people leaving work before state pension age may benefit from more flexible jobs that bridge the gap between permanent full-time work and retirement. Stephen Lissenburgh and Deborah Smeaton of the Policy Studies Institute studied the role of such 'bridge jobs' in the lives of people leaving work between 50 and state retirement age. Using national survey data, the research examined the characteristics and experiences of those leaving permanent jobs, factors associated with moving to temporary, part-time or self-employment and the qualities of these alternative forms of work. Leaving work tends to be a positive choice for workers with other advantages - including those (especially men) who have been with their present employer for longer, and are therefore more likely to have accumulated savings and pension entitlements, and those who have paid off their mortgages. People with health problems are also inclined to leave work early, especially low paid men; however, for them, 'early retirement' is more likely to have been due to an inability to stay in employment, rather than a positive choice. Similar divisions are apparent in entering flexible employment. Older workers from a more advantaged background are more likely to enter flexible employment rather than leave the workforce on departure from permanent full-time employment and are especially more likely to enter better quality flexible employment.

13 The quality of flexible employment varies according to its type. Self-employment offers job quality most comparable to that enjoyed by permanent full-time employees. Temporary employment rates next in terms of job quality, although this is more the case for those on fixed-term contracts than casual workers or agency temps. Part-time employment offers the poorest job quality among the three types of flexible employment. Overall, women appear more successful than men in finding flexible jobs for positive reasons, but often find that these jobs are of poor quality. The research identified a need for policies to: help older people with health problems to remain in work; to counter age discrimination; improve the skills of older workers; improve the financial incentives for older people to remain in work by offering them more generous tax credits and by increasing the National Minimum Wage; and to provide better regulation of casual and agency temp work Read the full Findings here. MOONEY AND STATHAM October Ref 032 Informal care and work after fifty Many people in their fifties and sixties combine work with caring responsibilities for grandchildren, older relatives or their own children. Researchers at Thomas Coram Research Unit looked at how decisions about employment are influenced by the desire or need to provide informal care. The study, based on a survey, case studies and analysis of existing data, found that: People in their fifties represent a 'pivot' generation with both care and work roles: - two in three people between 50 and retirement age are in paid work; - by age 50, one in three people have grandchildren; - three in five 50-year-olds still have living parents; - nearly half those surveyed (who were working for, or recently retired from, two councils) had some caring responsibility. Despite increasing demand for elder care and childcare, changes in the population and in work patterns (for example if early retirement becomes harder) mean that fewer people will be available to provide informal care. Nearly as many men as women surveyed undertook informal care, but women's caregiving was more intensive. Few employees wanted to give up work in order to take on caring responsibilities. However, decisions about working were based on a combination of factors, including financial considerations, health, job satisfaction and stress, as well as caring responsibilities. Those who combined work and care often did so at personal cost such as tiredness, illhealth and lack of leisure. Most employees did all they could to avoid informal care

14 having a negative impact on their paid work. However, opportunities for career advancement could be affected. Although some grandparents were prepared to give up work or reduce their hours to provide childcare for their grandchildren, there was a general reluctance to offer fulltime care. The researchers conclude that without more resources to support carers, their contribution may not be sustainable. Flexible working hours, the opportunity to reduce hours or take a career break without financial penalties, and good-quality, affordable support for carers and care recipients would help employees to combine care and work. Read the full Findings here. ROWLINSON May Ref 570 Planning for the future: the difficulties people face A shift is occurring in British government policy from State planning to individual planning. This emphasis on individual planning makes assumptions about people's capacity to plan for the future; in particular, it assumes that people have similar capacities to plan ahead. In-depth interviews with 41 people of different ages and social groups by Karen Rowlingson at the University of Bath explored people's views on and current plans for their future lives. The study found: The people interviewed generally did not make detailed, formal plans for the future. Even if people were both willing and able to think and plan ahead, their capacity to do so was often limited by economic insecurity and lack of resources. Those with secure (and high) incomes felt they were more able to plan ahead. Those with less secure (and low) incomes felt they had less capacity to make plans. People found it difficult to estimate the risks of certain events happening to them (such as divorce, ill health, unemployment), because they saw the future as uncertain on a global, national and individual level. Interviewees did not wish to dwell on the risks of negative events happening to them, because it made them feel depressed. The researchers conclude that their findings raise questions about the appropriate balance between State and individual planning. Current perceptions of people who plan ahead, and those who do not, do not take into account the constraints which many people face. Read the full Findings here. TAYLOR December Ref D62 Public policy initiatives for older workers

15 Older workers' employment patterns and their relationship to population ageing and pension systems are of increasing concern to policy-makers. Philip Taylor at the University of Cambridge Interdisciplinary Research Centre on Ageing investigated how policy-making towards older workers is developing in several countries - Australia, Finland, Germany, Japan, the Netherlands and the USA. The project examined a broad range of policy areas: pension reform, equality, social security and labour-market policy. Key findings were that: The issue of the employment of older workers is rising up the policy agendas of the countries studied, although at different speeds. All the countries have policies targeting older workers, including: - removing previous incentives to early retirement; - encouraging later retirement and flexible retirement; - legislation to counter age discrimination; - awareness-raising campaigns among employers; - guidance and training programmes targeting older workers; - advice and guidance for employers; - employment placements; - support for labour-market intermediaries; - employment incentive schemes. Those countries which have ended mandatory retirement have not seen an immediate change in retirement patterns. Employment subsidies have had limited value, but have shown more potential when paid directly to employees. While consistently argued for, there is little evidence as yet of integration of public policies towards older workers, with the notable exception of Finland. The researcher concludes that there is a need for: - much greater integration of public policies towards older workers, with better links to other policy areas and greater recognition of the diverse needs of older workers; - greater emphasis on removing age barriers from existing initiatives, rather than developing special schemes for older workers; - better engagement with business. Read the full Findings here.