As many people in the UK leave the labour market before their State Pension Age (SPA), the Department of Work and Pensions commissioned a multi-disciplinary team of researchers to offer evidence-based recommendations for policies designed to encourage individuals to extend their working life.
Dr Andrew Weyman, Dr David Wainwright, Rachel O’Hara, Professor Philip Jones and Dr Alan Buckingham conducted the research and discovered that individuals do not actively plan their working life. Instead, individuals react to the way that their choices are framed and are susceptible to ‘nudges’ that encourage or discourage early withdrawal from their working life.
Their report highlighted the importance of policy intervention to change the way that choices are framed (to change the ‘choice architecture’). Focussing on the decision to save for a pension, policies that enrol individuals automatically in pension schemes (with the choice of opting out) are preferable to policies that routinely warn of the pitfalls that individuals will face if they fail to save for an adequate pension.
Governments are able to work in partnership with employers to design the choice architecture. Employers are able to act as a conduit; to transmit and amplify the signals that governments emit. In this partnership, governments are able to cultivate the adoption of ‘good practice’ in the management of human resources.
The report identifies differences in:
- employment opportunities
- availability of flexible working arrangements
- individuals’ capacity to work and differences in culture
Government intervention is likely to be more effective when it is targeted on individuals who enjoy their work and on individuals with a greater opportunity to extend their working lives. The report identifies the groups (in the ‘receptive middle’) that are likely to respond to government intervention.
This research has informed the Department of Work and Pension’s Extending Working Lives Sector Initiative (2013), to manage the removal of the default retirement age, as well as the Age Positive Initiative (2013), to work with employers to develop guidance on the employment of older employees.
The report was one of thirteen cited by the Academy of Social Science to support the Campaign for Social Science.