Disability, Health and Retirement in the United Kingdom

Abstract

Over the last thirty years pathways to retirement have changed substantially in the UK. They have been dominated by spells of unemployment in the late 1970s, with then an increased importance of disability spells from the mid-1980s onwards. At the end of the period the direct route from work to retirement was increasingly more common. General economic conditions seem to have been important driving forces during the entire period. In contrast changes in health do not seem to provide convincing explanations for these trends: mortality has been falling over the period without any apparent link to the share of the population reporting ill health or disability or to the number claiming benefits. We also find evidence that recent reforms have had some impact. The halting of the previous growth in the rate of in-flow onto disability benefits in the mid-1990s coincided with the implementation of a major reform. Evidence from the pilots of the Pathways-to-Work programme in [2003][2004][2005] suggests that those moving onto disability benefits moved off these benefits faster than they would otherwise have done as a direct result of the programme.

Do Self‐insurance and Disability Insurance Prevent Consumption Loss on Disability?

“…This evolution of benefits is discussed in Banks et al . (). It is an important caveat in understanding the estimates of the effect of disability insurance on consumption because the disability insurance programme has changed during our sample period.…”

Effect of Pensions and Disability Benefits on Retirement in the UK

“…This subsection provides a brief summary of the key features of the UK disability benefit system and some trends over time in the numbers claiming these benefits and the generosity of the system. Further details of reforms to the disability benefits in the UK over the period since 1948 can be found in Banks et al (2012), with a brief summary (taken from that publication) provided in Box 2.1.…”

“…The proportion of women aged 50 to 64 receiving disability benefits also increased substantially between 1985 and 1995. These trends are largely unrelated to trends in health and disability but have instead been driven both by economic factors and changes in the stringency of the system; Banks et al (2012) provide more analysis of the drivers of these trends.…”

Labour Market, Welfare Reform and Inequality in the United Kingdom

“…In particular, labour participation of older people has remained high during the downturn, as early retirement packages are less generous than in the 1990s, pathways to early retirement through disability benefits have become more restrictive and concerns have risen about levels of pensions from defined contribution schemes following losses in financial wealth in recent years (Banks et al, 2011;Faccini and Hackworth, 2010). Low real wages and job insecurity might also have supported work participation, for example of second earners.…”