Wednesday 27 July 2016
Supporting people to work longer as the pension age increases
In March 2015, the States agreed to gradually increase the pension age by two months per year from 2020 so that the pension age would increase to 70 by the year 2049. This is one of the measures that the States have taken, and will continue to take, to help the Guernsey Insurance Fund, which funds the Old Age Pension, to remain sustainable in the future.
The States also directed Social Security to "investigate measures aimed at supporting longer working lives and assisting older people who wish to work to remain in the workforce, and to the States of Deliberation with its findings no later than December 2017." (Billet d'Etat IV of 2015)
So, the good news is that we are living longer, healthier lives, but this means that there will be more older people in Guernsey and Alderney in the future. Increasing the pension age will only have a positive effect on public finances if people are encouraged to continue to work until their pension age. In addition, the dependency ratio (the number of people of working age compared to the number of younger and older people) in Guernsey and Alderney is already one of the highest amongst advanced economies and is set to increase.
In December 2015, the States considered a report entitled 'Maintaining Guernsey's Working Population' and resolved "to consider how best to support and encourage employees to remain in the workplace until retirement age is reached." (Billet d'Etat XXIV of 2015)
Many people leave work before reaching the normal pension age. In fact, about a quarter of those in the 50-64 age group do not work. Some leave work early because they are financially independent and wish to volunteer in the community or pursue other interests; others leave early to care for family members, or because they have health conditions themselves or disabilities which prevent them from continuing in their jobs.
There are already more than 1,000 people between the ages of 65-69 who are in employment or self-employment, and some people work even longer. In order to support those people who continue to work the States have launched a 'longer working lives project' which aims to engage with islanders and employers and investigate what support might be needed and what we can do about it, with the aim of inspiring and enabling people to work for longer.
Deputy Michelle Le Clerc, President of the Committee for Employment & Social Security, said;
"The Longer Working Lives project will be looking at some of the challenges people face to continue working until, or past, pension age. This is vital given the pension age is increasing. We will be looking at what can be done to prevent people from developing health conditions which affect their work, to support people to combine care responsibilities with work, to keep their skills up to date or retrain to change career. We will also be working with employers to better understand how they can adapt to employing and supporting an older workforce. Older workers can and do bring a lot of knowledge and experience to the workplace."
For some people it can be a positive choice to continue working. One member of the Community Services Team, who is over pension age, said;
"Working in Community Nursing is a huge part of my life. I truly enjoy helping people and meeting them and their families."
Some people have made decisions to phase their retirement. Another health and social care professional, in their late 60s, said;
"I like my work and did not feel ready to go yet, but was pleased to be able to reduce my hours."
The States will also be looking at how to support people to work for longer in its role as employer. Deputy Le Tocq, Policy & Resources Committee lead for the States as an Employer, said;
"The States is one of the largest employers on the island and, as an organisation, we will be working closely with the Longer Working Lives Project to explore how the States can retain and support its own older workers."
If you would like to have your say and contribute to this project you can find out more information and how to get involved at www.gov.gg/longerworkinglives or you can email your comments to longerworkinglives@gov.gg.
