Currently, the retirement age in the UK as of 2022 is 66, with this set to start increasing again in 2026. Increasing numbers of people, however, are beginning to work beyond retirement age for a number of different reasons. But, what kind of impact is this having on the economy? Down below, we’re going to be exploring some of the benefits of people working beyond retirement age, and how this can impact the economy in a positive way. Keep reading if you would like to find out more.
The first benefit is that it provides extra income to those who continue to work. While this might not seem like an economic benefit at first glance, if you look a little deeper you realise that this means there is less need to support certain members of society through government schemes for a longer period. As well as this, the extra income gives more for those people to put back into the economy when they are purchasing goods and services.
Older people carry on working for the companies they work for, continuing to bring profits to companies, rather than them having to advertise for new workers, also saving money in the long-run.
Maintaining Health Benefits
There are a lot of companies out there who offer health benefits to their employees. While this is less common in the UK, it does still happen, with privatised healthcare still contributing to a large portion of healthcare as a whole. This takes some of the strain off of the already overrun NHS, by keeping these individuals in private healthcare.
The private health sector is an important player for the economy as we already mentioned it takes some of the strain away from public healthcare. The result of this is that it reduces the problem of government funding, enabling taxes to be lowered for the entire country.
Less Of A Decrease In Spending
The final thing that we’re going to mention is that if people continue to work beyond retirement age, there is less of a decrease in spending. The extra income that these people are making is likely to be put straight back into the economy when they continue to purchase goods and services in the same pattern that they have been for the last couple of decades of their life.
Research shows that when people hit retirement age and start to live off of their pension, they become more frugal, meaning that there is less spending on their part. This hits the economy pretty hard at times, an issue that isn’t so prominent with people working past the age of 66 right now.
Hopefully now, you see some of the benefits to the economy if people continue to work past retirement age. More people seem to be making the move to work longer than the required age at which you become entitled to your state pension, so it’s important to understand how this is going to be impacting the economy as a whole. Now you do, you can make an informed decision about whether this is something that you are interested in doing.