Retirement a New Concept

The concept of retirement and a retirement age is relatively recent. It was not until the end of the last century that the idea of setting a compulsory retirement age began to take hold in industrialised Britain. This view was influenced by developments elsewhere. In 1889 Chancellor Otto von Bismark introduced a state retirement pension in Germany payable at 65 years. This popularised that age as an appropriate retirement age. At that time 65 years was well beyond the normal life expectancy. Today an equivalent age would be approximately 80 years.

In 1901 the proportion of the population in the United Kingdom of Great Britain and Ireland who were over 65 years was 4.7%. At that time the expectation of life of a man aged 20 years was another 43 years. Those who reached 65 years were not likely to stop working. In the closing decades of the nineteenth century around two thirds of people aged 65 and over who had been in the work force were still working#. Staying on in employment was the normal practice for the majority of aged workers until incapacity forced retirement.

Ireland had a predominantly rural population living and working on the land and there was no end to working on the farm. Only a very small proportion of the elderly population in Ireland would have been employees and engaged in what might have been described as �occupational� employment.

In the Victorian period the central government kept out of income maintenance for the elderly. Where employment ceased the income of the elderly was reduced and where the family did not provide assistance there was the poor law, which is discussed below. Accordingly, retirement is a relatively recent# phenomenon and is associated in particular with the employment relationship that has evolved in developed economies.

Social and Economic Change

In the past economic and social conditions made it natural for the family to serve as the principal institution of old age support. The industrialisation of the economy has weakened the family as an economic unit and contributed to an income problem in old age. Economic change has transformed families that were largely self sufficient in rural agricultural areas into families supported by wage earners in urban industrial areas. In the past in a rural based economy the elderly passed their means of production on to their children in return for economic support for the remainder of their lives.

A money economy and a waged income created vulnerability when people lost or gave up their employment. It meant that fewer workers could accumulate a work connected productive asset to pass on to their children. Thus the trend towards smaller and less tightly knit families, increasing urbanisation and greater life expectancy has accentuated the need for security in old age. The provision of a pension has become a vital part of such security.

Earlier Retirement

The participation of the elderly in the labour force has been in decline throughout this century. In 1911 57% of men aged 65 years and over were in the labour force. By 1970 this had fallen to 20%, and by 1989 it was 9% of men and 3% of women. The proportion of men aged 60 to 64 years in the labour force fell from 87% in 1970 and to 54% in 1989. A more recent trend is that retirement earlier than 65 years is increasing and this is a reflection on the changing nature of work. Between 1970 and 1989 there was an increase in early retirement. This is a trend# common within the European Community.

Whilst retirement is associated with ceasing employment, there are many retired persons who are actually working in new or alternative employment. It should be remembered that throughout this work retirement is taken to mean the ending of a particular employment and not necessarily the end of all employment.