The media keep telling us that older retired people are better off than the younger generation. While they may have toiled for years to pay off their mortgages, they did have the good fortune to get into the housing market before it went mad and bad. Today’s pensioner households are also enjoying higher incomes than working households for the first time.
But as we note in a new paper just published by the online version of the journal Work, Employment and Society, this may be a story of bygone days. Older employees who are now heading into the pre-retirement zone have a different story to tell. Over a 15-year period younger employees (under-45s) consistently forged ahead in their wages and earnings compared with the over-45s. At the end of the period, the older group’s earnings had slipped back by 21 per cent compared with their younger counterparts, and for older male employees the comparative decline was larger still, at 32 per cent. A process of greater inter-generational equality, at least in terms of earnings, would appear to be underway.
So the good times will not be quite so good for the next generation of retired people.
There is also a message or two in this for younger workers. Service increments and promotion grades are being cut, not to mention company pensions. Pay is increasingly based on performance. The advice might be to push for as much as you can get while you are in your prime, and save all you can, because nobody will be making it up for you later.
Read the paper
Britain’s older employees in decline, 1990–2006: a panel analysis of pay, Work, Employment and Society, 20 March 2017