Staying in work aids health in older age, report finds

A comprehensive global ageing survey has studied barriers to healthy ageing across 21 nations, including Australia. Here’s what it found.

Working into older years benefits health and wellbeing, a new study finds.

The secret sauce for a happy and healthy life into your 60s and beyond is having a sense of purpose and maintaining meaningful human connections, which for many comes through a job.

But workforce barriers including a lack of opportunities, skills mismatches and downright ageism are standing in the way of that wellbeing pay-off for almost 900,000 older Australians, a new international report finds.

The McKinsey Health Institute analysis finds 12 per cent of the 7.4 million Australians aged 55+ want to work but aren’t in the workforce.

Sating that desire would not only have health and happiness outcomes for the individuals involved, but could also lift national GDP by 4.4 per cent, or $91bn a year, the study concludes.

The report “Ageing with purpose: Why meaningful engagement with society matters” is based on a comprehensive global ageing survey that studied barriers to healthy ageing across 21 nations including Australia.

It surveyed around 1,000 older people in each country to test whether older people’s “societal participation” through work, volunteering, education or engaging in community programs had a health pay-off.

“We found across all countries that older adults who participate in work, volunteering, education or in community groups report on average four to eight per cent better health than those who didn’t,” report co-author and McKinsey Associate Partner Madeline Maud said.

The report notes that the desire to remain working stays with many older Australians. For those aged 55-64, 42 per cent were employed and another 16 per cent wanted to work but weren’t.

Eleven per cent of 65-79 year-olds continue to work, with a further 10 per cent not working though still having the desire to.

And, surprisingly, almost one in 10 Australians aged 80+ (8 per cent) want to find their way back into the workforce, the report finds.

Among those who do continue to work, financial reward was the top motivation at 56 per cent, slightly higher than the average of other high income economies including the US, UK, France, Germany and Japan, the report found.

But many stayed in their job for non-financial reasons such as personal fulfilment (20 per cent) and health (14 per cent).

Re-engaging older Australians in the workplace has been on the political radar in Australia, with the Albanese government recently introducing legislation to support their decision to remain in or re-enter the workforce.

The new laws boosting the pension Work Bonus by $4000 to $11,800 before age pension levels begin to be affected.

“We need to make sure the system is incentivising older Australians to work if they want to,” social services minister Amanda Rishworth said. “No one should be financially disadvantaged by staying in the workforce longer, or returning … after some time away.”

Former NSW premier and now aged care provider HammondCare chief executive Mike Baird last week said there should be wider pension and superannuation reform to encourage retirees to return to work in key sectors such as aged care where there are critical workforce shortages.

“Given that the aged care sector is crying out for workers, while also facing an upcoming tsunami of demand, I believe it‘s high time we make it easier for older workers to step back in from retirement,” Mr Baird said.

One solution could be to exempt employment income completely for aged care workers (and other sectors that have a critical workforce shortage) from the aged pension income test,” he said. “This would mean that pensioners with limited work can work without losing their pension.”

Ms Maud said the McKinsey report findings suggested a win-win for the budget and for the life quality of older Australians if the right policy settings can be found.

“There are efforts from governments, the private sector and public sector organisations to drive age inclusivity in the workplace, but there‘s quite a long way to go,” Ms Maud said.

The report noted a number of countries had introduced policies to support more older workers to stay in work or return to work if they wanted to.

In Singapore, reskilling programs subsidised up to 90 per cent by its government, along with financial support for employers to redesign jobs for older workers, has seen the employment rate of 65+ citizens rise from 17.1 per cent in 2010 to 31 per cent in 2022, it said.