More over 65s are still working than six years ago, Aviva research shows

New Aviva research1 shows more people in the UK aged between 65 and 74 are still working compared to six years ago2. The survey, conducted earlier this year, shows a marked increase in the number of people over 65 who remain in the workforce compared to 2016, and a fall in the number drawing their state pension.

At a time of rising cost-of-living pressures, latest survey data shows fewer people across all age groups eligible to retire have done so compared to six years ago. The greatest shift has been for those aged between 65 and 74. Whereas 92% of this age group were already retired in 2016, only 79% are now.

Over 65s working until later due to State Pension age rise

This is due  to increases in the State Pension age, which was raised from 65 to 66 between December 2018 and October 2020 - and is set to rise further in future. The increase has disproportionately impacted 65- to 74-year-olds, who have been directly affected by this change in the last six years. In 2016, 96% of people in this age range said the State Pension accounted for some of their income, compared with 71% now. This represents a 25% decrease in the proportion of people in this age bracket receiving part of their income from the state pension.

As the State Pension Age continues to rise, this age group will need to plan to find alternative sources of income. Aviva’s survey results show the gap is only partially being plugged by people continuing to work for longer. There has only been a small rise in those saying wages or other earned income constitute a portion of their overall income – 23% versus 18% in 2016. For a fifth of people in this age bracket, an income gap left by State Pension deferral has not been replaced by wages.

This disproportionately impacted group is growing. In the UK, the 65 to 74 age group is larger than ever before, according to the 2021 Census statistics.3 People between those ages now account for almost 19% of the UK population, compared with 16% a decade ago.

Cost of living in retirement concerns rising

For those over 65, money worries about retirement figure more prominently than six years ago. In 2016 only 1% of this cohort said they were worried about running out of money in retirement, while another 1% said they wouldn’t have enough money to fulfil plans and dreams such as travelling. Six years on, the proportion has risen substantially to 11% for both.

Increase in property values a source of equity for over 65s

One asset that has grown for this age group, however, is the amount of capital they hold in property. Sixty-five to 74-year-olds have, on average, lived in their current house for 24 years, which means they have benefitted from nearly all the property price increases that have occurred since the late 1990s, when the current property boom began.

In 1998, when this age group typically bought their current house, the average cost of property in the UK was £66,2314. Our survey results show this age group’s property is now worth on average £302,000, more than four times the original purchase price.

Nearly two thirds of them own their property outright. Typically, those who do have been in tenure six years longer than those with a mortgage.

Matt McGill, MD Aviva Equity Release, comments: “In the years since we first carried out this research, significant events have impacted the way people feel about the economy, their futures and their retirement plans. Many of these events, such as the cost-of-living crisis, the pandemic and Brexit, have impacted people of all ages, but the increase in the State Pension Age has added new challenges specifically for the over 65s.

“While for some the income gap can be plugged by wages, our survey shows there’s still a significant shortfall for around a fifth of the over 65s, which has translated into them worrying more about having enough money in retirement.

“Despite this, the UK housing market has been on a steady upward trend since many current retirees bought their homes. Yet in most cases, the scale of the growth of people’s capital goes unrecognised - less than half (42%) of those we surveyed felt their home was worth more than their savings and investments. This suggests people may have accumulated more wealth in this asset than they realise. As cost-of-living pressures ramp up, the equity in people’s homes could become increasingly important when looking at ways to plan for a comfortable retirement.”


1 Aviva research conducted by Censuswide April 2022

1507 general consumers aged 45+

2 Aviva Real Retirement Report conducted by ICM Unlimited April 2016

1506 general consumers aged 45+

32021 National Census figures released by ONS

4 HMLR’s UK House Price Index