Accumulated Disadvantage Extends into Retirement

The ESRI report published today, 1 October 2019, ‘The ageing workforce in Ireland: working conditions, health and extending working lives’ shows that accumulated disadvantages seen throughout the working life are evident – and often exacerbated – well into retirement, particularly for women and those working in physically demanding roles.

The report notes an increased level of people over 55 years old working in Ireland (up from 10% in 1998 to 20% in 2018), which is well above the OECD average. However, there is wide variance in who is remaining working for longer, and whether that is for choice or necessity. Almost 7% of those aged 55-59 left employment early due to family care, with women five times more likely to have left paid employment early for care duty reasons. Today, one in ten people is a carer in Ireland, with 61% of carers being women. The State needs to value unpaid work and ensures that structural barriers to working, while balancing caring duties, are addressed in order to mitigate against accumulated disadvantage when people, and women in particular, become eligible for a pension.

Additional research published today is an Irish Life report which also notes the impact on women of disrupted labour patterns within the existing pay gap. The report shows that women have an average of 22% less – or €120,000 – in their pension pot at retirement compared to men. This is true even in cases where women are making the same pension contributions as men, and likely reflects the existing gender pay gap and lower wages earned by women.

Simply, the current employment disadvantages will transfer into pension disadvantages. In the context of rising State pension ages, targeted efforts are needed. Government and industry efforts are urgently needed to address the structural barriers that impede women, parents and carers to remain in, or return to, the labour market, if that is their choice.  Measures such as flexible working approaches and hours, targeted employment training interventions and reskilling are some such measures. These will only work in conjunction with the availability of affordable and secure childcare as well as sufficient home care hours available under a statutory scheme.

The journey to equality in older age begins at an earlier age. Both these reports are evidence that disadvantages in our working lives extend into the range of choices available to us all in older age, including access to employment as well as adequate income security.