Valuing the socio-economic contribution of older people in the UK

Appendix II: Literature review

March 2011

Literature review

Introduction

1.1 Britain’s population is getting older. Over the past century, average life expectancy has increased by 30 years and this trend is likely to continue. The Government Actuary Department predicts that by 2051 the average man at age 65 will have around 22 years of life ahead of him (compared to around 19 today) and the average woman will reach almost 901

1.2 A notable milestone was reached in 2007 when for the first time the British population included more people qualifying for the Old Age Pension than there were children under the age of 16

.

2

1.3 By 2031 the UK population will include over three million people over 85, compared to just 0.6 million in 1981

.

3

Table 1.1: Proportion of the UK’s population accounted for by older age cohorts:

. The proportion of the UK’s population aged 65 or over is expected to increase significantly over the next two decades, as the following table illustrates:

2008 2031

65-69 4.5% 6.7%

70-74 3.9% 5.6%

75-79 3.2% 4.5%

80-84 2.4% 4.2%

85-89 1.5% 2.7%

90-94 0.5% 1.5%

95-99 0.1% 0.5%

Source: CLG Population Projections

1.4 Moreover, people are living longer, healthier and more active lives. In 2005, Healthy Life Expectancy at age 65 was around 14.7 years for women and 12.9 years for men, representing a 10% improvement since 19974

1 Department for Work and Pensions (2006), The Opportunity Age

. The effect of longer, healthier lives is that for most people, ill-health and physical dependency are concentrated into a relatively short period in the last years of life.

2 Office for National Statistics/Government Actuary’s Department projections. 3 National Centre for Social Research: Living and Caring? September 2008 4 Office for National Statistics (2006) General Household Survey

Page 2 of 23

1.5 The demographic trend towards ageing reflects the tremendous improvements in national wealth and average living standards that have been achieved over the past 50 years and more. It also reflects the investment that successive UK governments have made in providing better standards of health care and more generous welfare payments to its older population. It also reflects, of course, advances in medical science and the availability of medical technology and services to older people through the NHS.

1.6 The demographic trend towards an ageing society has important implications for society at large. Clearly there are the financial implications of providing for the pension and health care needs of an ageing population to consider. But we need to recognise and harness in full the potential contributions that older people can and do make both to the UK’s economy and to society at large.

1.7 The economic contribution of older people is increasingly recognised. Government data from the Labour Force Survey (LFS, 2009) indicated that over 1.3 million people aged over 65 were in paid employment5

1.8 These trends can be expected to continue, especially since the scrapping of the Default Retirement Age and increasing protection for the rights of older workers through the Equality Act (2010).

. Moreover, longitudinal LFS data indicates that the employment rate among the over 65s has increased by nearly 50% since 2000.

1.9 Apart from extended involvement with paid work, older people are making an already significant and increasing contribution to community life in a wide range of thematic areas. For example, increasing numbers of older people are contributing to their communities through informal and formal volunteering; in providing social and child care, in helping to run community-based clubs, societies and groups and are contributing to democratic life by participating in demographic institutions such as local government and parish councils. It has also been suggested that older people have a particularly key role to play in the delivery of the coalition government’s Big Society agenda6

1.10 The purpose of this report is to provide a review of the available literature across a number of key areas that pertains to the potential costs and benefits that UK society faces as it becomes older. The literature review considers six often inter-connected themes, as follows:

.

• participation in the workforce

• income, wealth and spending

5 Office for National Statistics: Labour Force Survey (2009), Q1 data 6 agebomb.com/2010/05/12/the-key-to-the-big-society/

Page 3 of 23

• tax contributions

• contributions to care, including childcare

• volunteering

• participation in community life.

Participation in the workplace 1.11 The extent to which older people are engaged with the world of paid work is

changing. These changes are driven in part by public policy and legislation, for example, the government announced in January 2011 that forced retirements were to be made unlawful7. The scrapping of the Default Retirement Age will benefit the economy8

1.12 Opportunities for extended participation in the workforce are also driven by increases in Healthy Life Expectancy (HLE) (the remaining period of one’s life in which one is expected to be in good health). As with life expectancy, HLE has continued to increase in the UK over time, reflecting higher living standards, better diets, improved medical technologies and health services etc. According to ONS data

as more people choose to carry on working beyond the ages that were historically thought of as ‘retirement age’.

9, HLE in the UK is expected to be 71.7 years at birth in 2025 compared to 69.3 years in 2005. Moreover, data from the Health Survey for England (HSE) suggests that disability-free life expectancy at age 65 is 10 years, which represents an improvement over past years10

1.13 However, as of 2009 the employment rate of people aged over 65 is still only 11%

.

11. This is despite the fact that a significantly higher proportion of people in that age group say they would like to keep on working12. It has been estimated that adding an additional year to average working lives could increase the size of the UK economy by around 2%13

1.14 There is great scope for increasing the role of older people in the workforce. Reports have consistently pointed to increases in those over retirement age finding new work. The Guardian reported in 2006 of an 11% increase in the previous year of people over 60 finding new jobs

.

14

7 bbc.co.uk/news/business-12177927

. 10% of those of pensionable age are working (1.1 million

8 guardian.co.uk/money/blog/2011/jan/13/scrapping-default-retirement-age-benefit-economy 9 ONS (2009): General Household Survey 10 Reported in L. Mayhew (2010), Increasing longevity and the economic value of healthy ageing

and working longer 11 Department for Work and Pensions, Opportunity Age Indicator 17 12 Research cited in Building a Society for All Ages, DWP, 2009 13 National Institute for Economic and Social Research, How to pay for the macroeconomic

implications of pension reform, (2009) 14 guardian.co.uk/business/2006/jan/19/workandcareers.changingjobs

Page 4 of 23

people) of which two thirds are women. In addition to continuing to be in employment, older people can also be creators of jobs (Cumberland Lodge conference, Our Changing Expectations of Life)15

1.15 However, societal changes have resulted in more people now than previously retiring before reaching the State Pension Age (SPA). The employment rate of older men, for example, was much lower in 2004 than in 1979 (Focus on Older People, 2005

.

16

1.16 While it is the case that employment rates decline with age (to the extent that only half of those one year below the SPA are still in work), the economic contribution made by older workers should not be underestimated. Older workers are more likely to be self employed than their younger counterparts (Focus on Older People, 2005

). Because of rising numbers of people aged over 50, the employment rate amongst this age group has grown at a higher rate than those aged 25-49 (op cit). This trend will continue. By 2022 there are expected to be 3 million more people of working age aged over 50 and 1 million fewer aged 16-49.

17

1.17 Those above the SPA are more likely to work part-time. Working part-time can offer a bridge between full-time employment and retirement. Older women are more likely to work part-time, with 46% of those between 50 and SPA in employment working part-time. However, the older someone in full-time employment gets, the less likely they are to achieve flexible working prior to retirement, with networks and employment sector playing a part in their ability to attain part-time employment.

). Self employed men, for example, were more likely still to be working ten years later than people who were employees.

1.18 Other research suggests that some older people see paid work done after retirement as distinct from their main pre-retirement employment (Attitudes and Aspirations of Older People, 199918

Income

). This is particularly the case with regards to increased flexibility, less commitment and a better ability to achieve a mix between their various activities in and out of work.

1.19 Since 1979 pensioners’ incomes have risen about twice as fast as real earnings. Each new cohort of pensioners has been retiring with higher incomes compared to the last, largely due to the increasing coverage of private pensions. Overall, the state

15

cumberlandlodge.ac.uk/OneStopCMS/Core/CrawlerResourceServer.aspx?resource=2A5B37A8- 633F-44B2-BA41-7B37D4165EB0&mode=link&guid=2cc91d272d9d4954b4a87e0afb3fbc8c 16 statistics.gov.uk/downloads/theme_compendia/foop05/Olderpeople2005.pdf 17 statistics.gov.uk/downloads/theme_compendia/foop05/Olderpeople2005.pdf 18 campaigns.dwp.gov.uk/asd/asd5/rrep102.pdf

Page 5 of 23

pension accounts for just over half of pensioners’ aggregate gross income, with occupational pensions providing 27% 19

1.20 As people become older their propensity to be in employment decreases, so their income is often generated from other sources such as pensions and other benefits. The ONS Focus on Older People report

.

20

1.21 Income levels vary between different groups of pensioners, though income variations are not as great as those who are below the SPA. Those with the lowest income are likely to be older pensioners, single pensioners, women and some minority ethnic groups. This often reflects a number of issues, such as the extent to which people have worked consistently during their lives and indeed when they were born with more recent generations more likely to own their homes, for example. The following table summarises some of the key issues affecting incomes of different groups.

highlighted that the proportion of income derived from employment/self employment falls from 80% amongst households headed by someone aged 50-59 to just 10% for households headed by someone aged 70-79. In the same way that employment levels fall as people get older, so does income.

Group Commentary

Age Younger pensioners generally retire with higher incomes than existing pensioners; Salary-related pensions, for example, will be worth more as earnings tend to rise faster than prices.

Younger pensioners may also have some paid income.

Gender and marital status

Couples will have a higher income than single pensioners. Single pensioners are more likely to be female as their life expectancy is higher.

However, women will generally have lower incomes than men because they are less likely to have been in sustained full-time employment, have had lower earnings and previously could have paid a lower level of national insurance contribution – all of which affect pension levels.

Ethnicity Ethnic minority pensioners may have lower incomes, reflecting that they may have fewer pension contributions (perhaps having arrived in the UK later in their working life). Some may also not have their own private pensions and other investments. Attitudes towards savings can also vary between different ethnic groups.

Early retirees Those who retire early generally have higher incomes than those who retire at SPA. However, those forced to retire early (perhaps through ill health) will have lower incomes.

Source: Adapted from material in Focus on Older People, ONS, 2005

1.22 Older people are more likely to live under the low income thresholds – measured as

50%, 60% and 70% of median household income and this rises with age. Of those households headed by someone aged 50-54, 15% have a low income. This rises to 19% for those headed by someone aged 55 or above and to 20% for those headed by someone aged over 65.

19 DWP (2006) The Opportunity Age 20 statistics.gov.uk/downloads/theme_compendia/foop05/Olderpeople2005.pdf

Page 6 of 23

1.23 Other income information is provided by the ILC-UK report Consumption Patterns Amongst Older Consumers21

1.24 As such, weekly income per person is highest amongst those aged 50 and 64 (£321) where income is £100 a week higher than the oldest households. The research asked whether older people had too little money to spend on their needs. The results are shown below. Older age groups are less likely to report they had too little money, whilst a third of those aged 55-59 and 15% of the oldest respondents said they had too little money at least some of the time.

published in December 2010. This evidence shows that, whilst wages contribute 80% of income for those aged under 30, it makes up just 5% for those aged over 75. For this age group, benefits make up 55% of income, with pensions contributing a further 30%. Total household income peaks between the ages of 30 and 49 (£850 a week), decreasing for older cohorts. The average weekly income for those aged 75+ in 2007 was around £300, though older households will have fewer members.

Figure 1.1: Percentages of different age cohorts reporting the extent to which they had too little money

Source: ELSA Wave 4 Core respondents, reported by ILC-UK

Wealth 1.25 As well as income, pensioners may have wealth assets, including stocks and shares,

pensions and other assets. Pensioners also very often own substantial assets in the form of housing, with about 73% of pensioners being owner-occupiers already. Newly

21 ilcuk.org.uk/files/pdf_pdf_156.pdf

Page 7 of 23

retiring cohorts of pensioners include steadily greater proportions who own their own home22

1.26 However, wealth declines with age, having risen (through savings) during a working life and peaking at the time of retirement (as a proportion of individual’s pension funds are often taken as a lump sum). A recent report suggests that half of those retiring do not think they have saved enough

.

23

Further detail on wealth is provided in the ILC-UK report Consumption Patterns Amongst Older Consumers (December 2010)

.

24

1.27 Those aged 55-64 tend to have the highest financial wealth (a median of £18,000). Financial wealth is defined here as financial assets such as money held in current accounts or savings accounts of any type, as well as informal savings held at home or with family members. This group also has the highest property wealth and total wealth. Financial wealth amongst those aged over 85 is around £10,000. However, this compares favourably to younger age groups, such as £2,500 amongst those aged 35-44.

. Wealth here is defined as being held in property, financial wealth, private pensions, physical wealth (often household contents) and liabilities that may offset these loans (such as mortgages or other loans and debts). Household wealth is greatest for those aged 55-64 (£416,100), declining to £171,800 amongst those aged over 85. Much of this reduction is due to declining pension wealth (as pensioners draw down their assets to compensate for reductions in income). The largest proportion of household wealth is held in land or housing. Generally, older households (over 55s) will have more wealth in their property than younger households, who are typically still paying off mortgages on their property. Private spending on health and social needs (such as paying for a cleaner/gardener as the individual may not be able to do it anymore) is also included.

1.28 Other research (Attitudes and Aspirations of Older People, 199925

Income-related taxation

) points towards older people not feeling they have planned towards or made formal arrangements for their retirement. Those who have planned may well have been on higher incomes and had the opportunity to do so.

1.29 Older people pay a significant amount of direct taxation in terms of their earned income (as more older people continue to undertake paid work into the years usually regarded as ‘retirement years’) and also on their pension income.

22 DWP (2006) The Opportunity Age 23 guardian.co.uk/money/2011/jan/12/half-retirees-not-saved-enough 24 ilcuk.org.uk/files/pdf_pdf_156.pdf 25 campaigns.dwp.gov.uk/asd/asd5/rrep102.pdf

Page 8 of 23

1.30 Data from the HMRC suggests that in 2007/08 older people paid over £13.6 billion in income tax on their earned and pension income.

Table 1.2: Income tax paid by over 65s, 2007/08

Age range No. taxpayers Average tax paid (£) Total tax paid (£ billions)

65-69 1,640,000 3,370 5.53

70-74 1,280,000 2,690 3,.44

>=75 1,870,000 2,490 4.66

Total 13.63

Source: HMRC

1.31 Current tax policy has a number of negative implications for older people. For example, the New Policy Institute has reported on the impact of council tax on older people's income26

1.32 Whilst more pensioners are now more eligible for Council Tax Benefit, many chose not to take it up. Take up rates amongst all pensioners are just 65%, which falls to 45% for pensioners who are owner-occupiers. Much of this low take up is due to general reluctance to take up means-tested benefits and specific complications around accessing the benefit.

. Their findings showed that between 1993 and 2003 council tax almost doubled and that the burden of council tax had risen for all tax payers. This was most acutely felt by pensioners whose income had risen more slowly than those of working age. This is because increments to the state pension have for several decades been linked to price inflation rather than increases in average earnings. Moreover, the tax burden is nearly twice that for older people compared to the average person. The burden is also slightly higher for older pensioners than younger pensioners.

1.33 Recent research shows that inflation can often leave older people worse off. Age UK's Silver RPI 27

26 npi.org.uk/files/Newper cent20Policyper cent20Institute/councilper cent20taxper cent20hta.pdf

calculated that those aged over 55 were on average £600 a year worse off. The Silver RPI uses information from the Living Costs and Food Survey, reweighting the 78 items which make up the official RPI, ensuring that typical expenditure patterns amongst the over 55s are better reflected. For example, the lower mortgage borrowing rates that have been prevalent over the past three years (since 2007) have had little benefit for older people who, generally, have already paid off their mortgage debts.

27 ageuk.org.uk/latest-press/archive/inflation-leaves-over-55s-600-a-year-worse-off/

Page 9 of 23

1.34 Conversely, older people are more impacted by cost increases on items where they spend proportionally more than the average person, such as utilities.

Asset transfers 1.35 There is some evidence that suggests that older people make significant

contributions by transferring financial assets to family members at key stages of life. Examples include gifts to the parents of grandchildren to help with school fees and direct gifts to grandchildren or other young people to help with university fees, the purchase of a car or a contribution towards the deposit for a first house purchase.

1.36 Evidence of these types of contributions is hard to come by but there is some patchy evidence as follows. First, according to HMRC data, over 65s save around £330 million each year in Child Trust Funds. A similar amount is estimated to be saved by over 65s in National Savings products for children.

1.37 In addition, Safe Home Income Plans (SHIP), the trade body for financial institutions that provide regulated equity release schemes in the UK, estimate that the value of the equity release market managed by its members in the UK in 2008/09 was around £950 million, which accounted for 84% of the UK market as a whole28. Meanwhile, research cited by Saga suggests that approximately 20% of equity released through such schemes is used for the purpose of making gifts to family members with an average value of £27,00029

1.38 Informal evidence suggests that some grandparents make important and specific financial contributions to their grandchildren's further education. The SFS Group who sells insurance and provides advice to parents on how to fund private education, has given anecdotal evidence

.

30 from their conversations with independent school head teachers, that grandparents are paying for their grandchildren’s private education in order to mitigate inheritance tax. There is also evidence of grandparents establishing trust funds in order to pay for private education and further education31. Research by YouGov and Kidstart shows that the financial contribution made by grandparents to their grandchildren extends to contributions to pocket money (31% of grandparents surveyed), school fees (10% of grandparents surveyed) and, later on in life, cars (17% of grandparents surveyed) and first homes32

28 Facing the Future: redefining equity release to meet today’s social and economic challenges;

SHIP, July 2009

.

29 saga.co.uk/money-and-finance/retirement-solutions/equity-release/press-releases/greater-comfort.aspx

30 sfs-group.co.uk/grandparents-put-trust-in-private-schools/?parent=11 31 sfs-group.co.uk/families-turn-to-grandparents-for-fees-help/?parent=11 32 sfs-group.co.uk/grandparents-footing-the-bill/?parent=11

Page 10 of 23

Spending 1.39 Households headed by people in older age groups generally spend less than

younger households. The ONS Focus on Older People report shows that amongst households headed by someone aged 50-64, average weekly spending was £441 in 2003/4, falling to £183 amongst those aged over 75. This is due in part to smaller household sizes amongst older people, as well as merely that older people are known to spend less. Spending patterns change with more money spent on necessities (housing, food, heating) and less on other activities (recreation, transport, culture). Some of this is again a factor of age as older people will generally no longer be spending money travelling to work.

Table 1.3: Households expenditure as a proportion of total expenditure, by age of household reference person

50-59 60-69 70-79 80 and over

Food and non-alcoholic drinks 10 12 15 15

Alcoholic drinks, tobacco and narcotics 3 3 3 2

Clothing and footwear 4 5 4 3

Housing, fuel and power 9 9 12 15

Household goods and services 9 8 9 7

Health 1 2 3 2

Transport 15 14 10 12

Communication 2 2 3 3

Recreation and culture 14 16 14 13

Education 1 0 0 0

Restaurants and hotels 7 7 6 5

Miscellaneous goods and services 8 7 9 9

Other expenditure items 15 12 13 13

Source: Focus on Older People, ONS, 2005

1.40 Research conducted by James Banks and Andrew Leicester (Expenditure and Consumption, 200633

33 ifs.org.uk/elsa/report06/ch9.pdf

) (using the ELSA – English Longitude Study of Ageing – dataset) shows, in detail, patterns of expenditure amongst older people. Those aged 52 or over spend £45 a week per adult on food and this pattern is relatively consistent across all age groups. Spending on food does increase with wealth, especially for food consumed outside the home. For those at the top of wealth distribution, spending on food consumed outside the home is almost five times as great as for those at the bottom. Spending on necessities such as food, fuel and

Page 11 of 23

clothing, increases with wealth, but the share of the budget falls. For those of the poorest group (low-wealth households aged 75 or above) the proportion stands at 35% of disposable income.

1.41 Aside from food, the research also paints a picture of the levels of other spending. On average, 4% of disposable income is transferred to people outside the household (this may also include charitable giving), rising to 7% amongst the wealthiest, oldest households. In most cases, the proportion is higher than that spent on either clothing or leisure services. Around 8.3% of households spend a tenth of their income on domestic fuel, though there are variations by age, wealth, health and quality of life.

1.42 The ILC-UK report34

Table 1.4: Household expenditure by age of household reference person (£s per week)

also provides household expenditure by age. This is shown below.

Expenditure item

Under 30 30-49 50-64 65-74 75+ All

Food and non-alcoholic drinks

38.4 53.9 53.2 43.6 33.4 48.1

Alcoholic drinks, tobacco, etc.

10.7 12.6 13.4 9.4 4.9 11.2

Clothing and footwear

22.4 28.5 24.0 13.0 7.7 22.0

Housing, fuel and power

84.4 56.2 47.9 36.4 35.5 51.8

Household goods and services

23.3 36.7 34.6 25.4 16.9 30.7

Health 3.3 4.8 8.2 6.4 5.0 5.7

Transport 56.4 76.8 74.6 38.1 19.5 61.7

Communication 14.5 14.1 12.3 8.5 5.8 11.9

Recreation and culture

44.7 66.1 67.5 51.8 28.1 57.4

Education 12.0 9.9 6.2 0 0 6.8

Restaurants and hotels

39.9 47.1 41.1 22.7 12.8 37.2

Misc goods and services

33.1 43.5 37.2 23.9 20.1 35.3

All expenditure groups

383.0 450.0 420.3 279.9 190.5 379.8

34 ilcuk.org.uk/files/pdf_pdf_156.pdf

Page 12 of 23

Expenditure item

Under 30 30-49 50-64 65-74 75+ All

Other items 76.7 111.9 77.0 40.8 27.5 79.3

Total expenditure

459.7 561.9 497.3 320.8 218.0 459.2

Source: ILC-UK

1.43 Expenditure on food is lower amongst households headed by those aged over 75 than other households. The same is also true for spending on alcohol, housing/fuel, transport, communication, education, restaurants and miscellaneous.

1.44 As a consequence of their expenditure patterns, older people also contribute significant amounts to the Exchequer through expenditure-related taxation such as VAT and excise duties. SQW has modelled the value of these payments for 2007/08 based on data obtained from the 2008 Family Expenditure Survey published by ONS.

Table 1.5: Expenditure related taxes paid by the over 65s (£ billions), 2007/08

Expenditure related tax 65-74 75+ All 65+

VAT 9.11 5.84 14.95

Excise 1.28 0.70 1.98

Total 10.39 6.54 16.93

Source: SQW based on ONS data

Contribution to childcare 1.45 Older people can make a range of contributions to childcare. They provide ad hoc

support and care for grandchildren on the occasions that the children's parents are unavailable, or they can provide more regular, structured care, such as looking after children on a daily basis when the parents are at work. The ONS Focus on Older People report (2005) reported that 60% of grandparents looked after grandchildren when they were younger than 15. The report also quotes Age UK research which found that one in four grandparents care for their grandchildren on a regular basis.

1.46 Other research35 suggested that a third of grandparents regularly holiday with their grandchildren simply as a means of providing childcare. Over the course of the six week summer holiday, the research estimated that grandparents save parents £600m36 in childcare costs, whilst in total terms the value of childcare provided by grandparents is in the region of £4 billion. Conversely grandparents may risk hardship themselves by taking on childcare37

35

.

inmyprime.wordpress.com/category/childcare/ 36 dailymail.co.uk/travel/article-1305381/Grandparents-provide-summer-childcare-family-

holidays.html#ixzz0xVacgR1a 37 guardian.co.uk/money/2010/mar/02/grandparents-childcare-pay-hardship

Page 13 of 23

Providing social care 1.47 As was said at the outset of this report, the UK’s population is ageing, manifested in

population projections from CLG that suggest that by 2031 the UK population will include more than 3 million people aged over 85. Moreover, it has been projected that the number of disabled people over 65 will grow to 4 million by 2031, an increase of nearly 75% compared to the estimated number in 200238

1.48 Social care costs are the largest cost related to an ageing population for local authorities in the UK. The Audit Commission reported

.

39

1.49 However, in a separate report

in October 2009 that local authorities in England spent £8.8 billion on personal social care for older people in 2007/08. However, the Audit Commission in the same report point out that older people are not simply a social care cost but that older people make up much of the formal and informal volunteer workforce delivering many services to other older people.

40

1.50 Data from the 2001 Census indicates that people over the age of 65 accounted for around one third of carers who provide more than 50 hours of care per week

the Audit Commission addressed a number of ‘common misconceptions’ about the numbers and proportion of older people who are in receipt of formal (that is, local authority funded) social care services. In particular, the Audit Commission found that only 15% of people over 65 receive local authority funded social care. A far greater proportion of long term care is in fact provided by the family.

41

1.51 The NCSR study involved detailed surveys of carers of different ages and found that moving into a caring role was associated with a significant reduction in family earnings, personal earnings and family income. The research also found that carers who provided moderate or heavy levels of care experienced significantly lower levels of quality of life compared to a comparison group of non-carers.

. This finding was confirmed by research published by the National Centre for Social Research in 2008 Living and Caring? An investigation of the experiences of older carers, which found that about one third of unpaid carers in England are aged 60 years or older and that the growing demand for long-term care of older people is expected to be met by older cohorts of carers.

1.52 The economic value of social care provided by older people is considerable. Research published by Carers UK in 2007 (undertaken by the University of Leeds) estimated that the overall economic value of informal carers in the UK was worth

38 Living and Caring ? An Investigation of the Experiences of Older Carers: National centre for

Social Research, September 2008 39 Audit Commission (2009), Financial Implications for Local Authorities of an Ageing Population 40 Audit Commission (2009), Don’t Stop Me Now: preparing for an ageing population. 41 Office for National Statistics, 2001 Census

Page 14 of 23

around £87 billion per year42

1.53 The Audit Commission has recognised that the challenge of providing for an ageing population is complicated by the increasing diversity of that population

. Assuming that around one third of this value is attributable to people over 65, then the value of this contribution was likely to have been in the order of £30 billion in 2007. This figure will rise further in real terms as the UK population continues to age.

43

Replacement parenting

. This includes growing numbers of very old people, including centenarians, as well as increasing numbers of ageing black and minority ethnic (BME) people.

1.54 Older people also have an important role to play in “looking after” children on a full-time basis because parents are no longer able to fulfil that role. The Family Rights Group (2008) estimate44

1.55 Recent research published by Grandparents UK estimates

that around 300,000 children in the UK are looked after by 200,000 family and friends carers because parents are not able to do so because of reasons such as disability, ill-health, dependency problems, imprisonment, etc.

45

Volunteering

that 12% of the family and friends carers are aged 65-74 and that 0.4% are aged 75 or over. This suggests that around 25,000 older carers could be responsible for providing replacement parenting for around 38,000 children in the UK and are therefore providing an important social contribution and a service that might otherwise have to be provided through local authority placements or other means.

1.56 Changes in health mean that people are living longer. This means that the years of active life that people have are also increasing, making it easier than previously for people to do activities into old age46. Older people may choose to volunteer as a means of participating in their community and to make a meaningful contribution when doing paid work is no longer an attractive option (Focus on Older People, ONS). For others, there is a need to be doing some form of activity to stay involved with their communities or to stay busy47

1.57 Such volunteering may be formal or informal. Formal volunteering is with charities and other groups, whilst informal volunteering is helping friends or neighbours

. Such activities may be a continuation of what they were doing during their working life, or unrelated to previous work.

42 Carers UK (2007) Valuing Carers – calculating the value of unpaid care 43 Audit Commission (2008): Don’t Stop Me Now: preparing for an ageing population 44 Family Rights Group, cited in Saunders H. and Selwyn J, 2008. Evaluation of an informall

kinship team, Adoption and Fostering, Vol 32:2 pp31-42, 2008 45 “What if we said no?”, Grandparents Plus, 2010 46 jrf.org.uk/publications/volunteering-retirement 47 voluntaryworker.co.uk/Volunteeringforolderpeople.html

Page 15 of 23

(although it should be noted that this sort of help may not be “voluntary” (Attitudes and Aspirations of Older People, 199948

Table 1.6: People participating in community activities by age: 2001 and 2003

). Generally the numbers informally volunteering are higher than those formally volunteering.

Informal volunteering Formal volunteering

2001 2003 2001 2003

50-64 31 33 28 29

65-74 36 39 28 30

75 27 32 19 19

Source: Focus on Older People, ONS, 2005

1.58 Previous research has highlighted the disproportionate role that older people make in providing voluntary effort. Research49

1.59 A 2008 Foresight report

undertaken by VITA/Volunteering England in 2006, for example, found that people over 65 formed 31% of the volunteer workforce of 477 voluntary sector organisations surveyed and that they contributed a similar proportion of the total number of hours provided by volunteers to those organisations. Moreover, this research focused on formal volunteering only. Older people also provide a large proportion of informal volunteering effort in the UK.

50

• improved rates of staff retention

demonstrated that the experience and skills of older people are a valuable resource for businesses as well as for voluntary and civic organisations. The DWP report The Opportunity Age (2006) also identified a number of advantages for businesses and other organisations that possess an age-diverse workforce. These benefits include:

• higher staff morale

• fewer short-term absences

• higher productivity

• a wider range of skills and experiences

1.60 Many of these attributes are also salient for voluntary sector organisations.

1.61 In addition to providing people with a purpose, volunteering also brings benefits to the volunteers51

48

. These include maintaining self-discipline from working life and maintaining self-respect and self-confidence. These benefits also contribute to

campaigns.dwp.gov.uk/asd/asd5/rrep102.pdf 49 VITA/Volunteering England (2006), The Indispensible Backbone of Voluntary Action 50 Government Office for Science (2008): Foresight Mental Capital and Well-being Project: Final Report 51 voluntaryworker.co.uk/Volunteeringforolderpeople.html

Page 16 of 23

mental and physical wellbeing, allowing older people to cope better with the demands of ageing52. Research53

• the desire to help others or to contribute to a cause

commissioned by VITA (Volunteering in the Third Age) identified a number of motivations for older volunteers to get involved with volunteering, including the following:

• the opportunity to do something different, useful and worthwhile

• the desire for an increased role in the community including helping other older people and helping young people

1.62 The VITA research also surveyed older volunteers to ascertain what motivated older volunteers’ continued involvement with volunteering. The research identified various motivations, including feelings of better physical and mental health as well as enjoyment and the opportunities to continue to use specific skills (and to teach others to use those skills

1.63 Older people bring a range of qualities to volunteering. They will have built up skills and experience inside and outside work during their lives which younger people may have still to develop. They are likely to have better communication skills and be better able to relate to people from a broad range of backgrounds. They may well bring greater commitment and maturity. Additionally, they are likely to be more flexible than younger people who may be comparatively inflexible due to the demands of work or childcare.

1.64 Data from the 2008/9 Citizenship Survey (CLG)54

1.65 Research from the Cabinet Office (Helping Out – A national survey of volunteering and charitable giving

shows that 30% of those aged 65-74 do some formal volunteering, whilst 38% do some informal volunteering. Similarly, 20% of those aged over 75 do some formal volunteering, whilst 32% do informal volunteering. Those who regularly took part in formal volunteering did an average of 12.6 hours in the four weeks prior to the interview. This level has increased from 11 hours in 2007/8. The amount of time spent undertaking formal volunteering tends to increase with age (to 16.8 hours amongst those aged between 65 and 74).

55

Table 1.7: Proportion of those aged over 65 by frequency of volunteering

) provides some further information on volunteering. The table below shows the percentage of people aged 65+ by the frequency of volunteering.

Aged 65+

All formal volunteers 53%

52 esrc.ac.uk/ESRCInfoCentre/about/CI/CP/societynow/issue6/Class_barriers.aspx 53 VITA (2007): Volunteering in the Third Age: Final Report 54 communities.gov.uk/documents/statistics/pdf/1547056.pdf 55 volunteering.org.uk/NR/rdonlyres/BFC9C41E-7636-48FB-843C- A89D2E93F277/0/OTS_Helping_Out.pdf

Page 17 of 23

Aged 65+

Regular formal volunteers 41%

Occasional/one-off volunteers 12%

Non-volunteers 47%

Source: Helping Out – A National Survey of Volunteering and Charitable Giving

1.66 The report also provides detail of activities done by volunteers. This is split by proportion of all people (so 41% of all people do not do any form of volunteering) and by proportion of current volunteers. These final figures do not total 100% because many people will be doing more than one activity or their activity can be classified in more than one way. Volunteering is focused on a number of key activities such as education, religion, sports and health.

Table 1.8: Proportion of all people and all volunteers by volunteering activity

All % Current volunteers %

Education – schools, colleges, universities 18 31

Religion 14 24

Sports, exercise 13 22

Health, disability 13 22

Children, young people 11 18

Local community, neighbourhood, citizens’ group 10 17

Hobbies, recreation, social clubs 8 13

Overseas aid, disaster relief 6 11

Animal welfare 6 10

Elderly people 5 8

Arts, museums 5 8

Conservation, the environment, heritage 4 8

Social welfare 4 7

Politics 2 4

Safety, first aid 2 4

Justice, human rights 2 4

Trade unions 2 3

Other 2 3

None 41 n/a Source: Helping Out – A National Survey of Volunteering and Charitable Giving

1.67 The 2008/9 Citizenship Survey includes some data on the amount of time spent volunteering (over a four week period). It provides a somewhat mixed picture. It suggests that the time spent informally volunteering is higher amongst younger people, whilst the time spend formally volunteering increases with age.

Page 18 of 23

Table 1.9: Number of hours spent volunteering over the previous four weeks

Regular informal volunteering Regular formal volunteering

16-25 8.19 7.43

26-34 8.04 12.87

35-49 7.2 12.49

50-64 7.76 13.49

65-74 7.81 16.82

75 6.93 13.61

Male 7.04 13.15

Female 8.15 12.19 Source: 2008/9 Citizenship Survey56

1.68 The data in the table above is somewhat at variance with that from other research and may reflect some confusion among survey respondents about what constitutes ‘informal volunteering’.

1.69 Volunteering in the Third Age (VITA) was established in 2004 to champion volunteering by older people. A final report on its impact was released in 200757

Table 1.10: Volunteering themes among older volunteers

. The 477 organisations surveyed reported those over 50 making up two thirds of the volunteer workforce and provided 68% of the total number of hours volunteered. Almost a third of volunteers (31%) were aged over 65. Organisations with a larger need for volunteers attracted additional older volunteers. Older volunteers are more likely to be found in organisations working in social services, health and the environment and less likely to be found in culture, recreation and intermediary bodies. In terms of roles, older people are less likely to be involved in fundraising (despite this generally being the most prevalent role for volunteers) and more likely to be involved in providing front line services to users or beneficiaries.

Field Percentage of volunteers aged 50+

Percentage of volunteers aged 65+

Percentage of hours contributed by older people

Social services 75 40 80

Health 73 32 74

Environment 71 42 69

Philanthropic intermediaries and voluntarism promotion

44 4 43

Culture and recreation 43 14 48

All 65 30 67

Source: VITA Final Report 2007

56 communities.gov.uk/documents/statistics/pdf/1547056.pdf 57 wrvs.org.uk/vita/assets/VITA%20Final%20Report.pdf

Page 19 of 23

1.70 The report highlights benefits to the volunteers themselves and benefits to the organisations. In terms of benefits to the volunteers, volunteering is enjoyable and has health benefits (such as physical and mental health and also providing a more positive experience of ageing). Volunteering also provides individuals with a structure to their lives after retirement. It gives them an opportunity to participate in their local community and helps them to increase their personal confidence. It also gives those who volunteer the opportunity to access new experiences and new learning.

1.71 For organisations and society more widely, there are also a number of benefits flowing from older people who volunteer. Older volunteers are more likely to remain involved with volunteering for longer periods and they are also more likely to be able to devote more time to volunteering activities. They can also be more flexible and often provide greater commitment and reliability. Other advantages include the wider range of experience and accumulated skills that older volunteers can offer the organisations to which they volunteer. Also, older people can often provide a better link between the service and the demography of the service users.

1.72 Between 1999 and 2003, funding was provided to the Home Office Older Volunteers Initiative to improve the number and quality of opportunities for those aged over 50 to volunteer. The final review58

1.73 The Institute for Volunteering Research has provided further evidence via a national survey of volunteering and charitable giving

showed that older volunteers undertook a range of activities including direct work with users or beneficiaries, support roles (administration and secretarial support), practical tasks and leadership/managerial activities.

59

Participation in community life

. The research highlighted that those aged 35-44 (64%) and 55-64 (64%) were more likely to volunteer than other age groups. Those aged 55-56 (42%) and 65+ (41%) were more likely to be regular volunteers.

1.74 Apart from formal and informal volunteering, older people are very often actively engaged in a variety of other aspects of community life. These activities include:

• involvement with democratic institutions

• civic engagement

• other types of community involvement

1.75 Some key aspects are described overleaf.

58 rds.homeoffice.gov.uk/rds/pdfs2/hors248.pdf 59 ivr.org.uk/NR/rdonlyres/1225B8F0-57AD-4830-89D6-AF6448D7AAF7/0/Final_Giving_Time.pdf

Page 20 of 23

Involvement with democratic institutions

1.76 Evidence suggests that older people are often more keenly interested in politics than their younger counterparts. Research by MORI, quoted in the ONS Focus on Older People report, highlighted that 65% of the over 55s were interested in politics, compared to 48% of those aged under 35. This translates into the proportion of people voting in both local and national elections, although older people feel, like many others in society, detached and remote from government at all levels (Attitudes and Aspirations of Older People, 199960

Table 1.11: Turnout levels in the 2010 UK General Election

). In the 2010 UK General Election, for example, turnout amongst those aged 55-64 and 65+ was higher than for other age groups, although the increase in turnout was lower than compared to other age groups.

Turnout Change since 2005

18-24 44% +7

25-34 55% +6

35-44 66% +5

45-54 69% +4

55-64 73% +2

65 76% +1

Source: ipsos-mori.com/researchpublications/researcharchive/poll.aspx?oItemId=2613

1.77 The table below shows the turnout by age and gender.

Table 1.12: Turnout levels in the 2010 UK General Election, by gender

Turnout Change since 2005

Men Women Men Women

18-24 50% 39% +11 +4

25-34 56% 54% +7 +6

35-54 67% 67% +3 +6

55+ 76% 73% +2 0

Source: ipsos-mori.com/researchpublications/researcharchive/poll.aspx?oItemId=2613

1.78 Other research, such as that by Hyde and Janevic in 200461

60

, shows that voting in elections is higher amongst men than women, particularly amongst the oldest age groups. Of those aged over 80, 89% of men and 80.8% of women voted in the (then)

campaigns.dwp.gov.uk/asd/asd5/rrep102.pdf 61 social activity, from ifs.org.uk/elsa/report03/ch5.pdf

Page 21 of 23

most recent election. This compared to 79.1% of men and 77% of women aged 50-54.

Civic engagement

1.79 Data from the 2000 General Household Survey described the extent to which people felt they were civically engaged62

Other types of community involvement

. Those aged over 50 were less likely to feel engaged than those aged 40-49, but more felt more engaged than younger age groups. However, those aged 50-59 and 60-69 were more likely to take action to become more engaged. Aside from those aged 16-29, those aged 70 and over were least likely to take action to become more engaged.

1.80 Older people often provide key roles in a variety of community organisations, such as faith groups, community governance organisations (such as parish councils, boards of school governors etc.) as well as community-based cultural, leisure and sports organisations etc.

1.81 Membership of organisations varies by age, sex and type of organisation63

1.82 Newspaper readership rates also change by age and gender. Amongst males, the highest readership rates are found in those aged 70-74 and 75-79, whilst amongst women the highest rates are found in those aged 60-64 and 65-69.

. Research has found that membership of a sports club is more than twice as high amongst those aged 50-54 (23.6% and 26.3%) than those aged over 80 (9.3% and 5.4%). Often membership of organisations is related to good health and higher occupational level. Amongst those aged 50-59, 30.8% of men and 36.7% of women in managerial/professional occupations are members of sports clubs, compared to 15.0% and 16.1% respectively of those in routine and manual occupations.

Conclusions 1.83 This review of the available literature has confirmed that older people are already

making very large financial and non-financial contributions to the quality of life in the UK. The scale and importance of this contribution will increase significantly over the next two decades and beyond, reflecting both the increasing numbers (and proportion) of older people in our population.

1.84 Changes in legislation, coupled with changing aspirations among older people themselves will increase the rates at which older people participate in the workplace, both either on a full-time or a part-time basis. It will also increase the earnings and

62 statistics.gov.uk/cci/nugget.asp?id=183 63 Hyde and Janevic, Social activity, from ifs.org.uk/elsa/report03/ch5.pdf

Page 22 of 23

contributions that older people make to Exchequer revenues via income and indirect taxation.

1.85 A key challenge for society as whole will be to harness better the skills, talents and experiences of older people through volunteering or other aspects of community involvement. As well as conferring benefits to the volunteers themselves, increasing both the scale and the intensity (by harnessing, in full, their skills and experience) of older peoples’ engagement with voluntary sector and community organisations, volunteering offers huge opportunities to enhance the quality of services that are provided to communities.

WRVS,

Beck Court, Cardiff Gate Business Park,

Cardiff CF23 8RP

Registered Charity 1015988 & SC038924

For more information on the work WRVS does in communities across the UK and to download a copy of the Gold Age Pensioners report, literature review and economic model, please visit goldagepensioners.com