The effects of age and income on retirement decisions: A comparative analysis between Italy and the UK

Abstract

has a PhD in Pensions, she is the Head of the Finance and Business Law Department at the Westminster Business School and the Director of the Pension Investment Academy. Orla has published numerous articles and has wide experience of pension matters. Roberta Adamiis a senior lecturer in Finance at the University of Westminster and a visiting lecturer at the University of Bologna. She was formerly a Financial Analyst at Citibank and Tokai Bank, Europe. Roberta has spoken at numerous conferences and contributed many articles to the pensions press. James Waters is a lecturer in macroeconomics and microeconomics at the University of Westminster. He was formerly a researcher at the University ' s Business School, and currently researches on economic growth. He holds degrees from the Universities of Bradford and Cambridge.Abstract Governments of many Western countries are committed to render the pension system sustainable in the long term. We study the links between pension reforms, retirement age, income and retirement decisions by examining data from two nationwide surveys in Italy and the UK. While the Italian system remains centred on state pension, the UK places greater emphasis on private savings and on the increase of retirement age. Our analysis of the differences in retirement decisions between the UK and Italy over a ten-year period (1992 -2002) allows us to determine the effective retirement ages and reveal a greater volatility in the average Italian retirement age compared to the UK. By investigating the relationship between income and retirement age, we conclude that, in both countries, high earners retire relatively early, while those in the lowest income groups tend to retire later; however, there are marked differences in the way our two samples behave over the period studied.

Between Successful and Unsuccessful Ageing: Selected Aspects and Contexts

“…As Gough et al (2008) have noted by investigating the relationship between income and retirement age, they concluded that high earners retire relatively early, while those in the lowest income groups tend to retire later. This may, however, be the situation in exception of ill-health, industrial accidents, or accidents of any form.…”

“…To the contrary, shortening the time of employment and a more extended period of retirement would lead to very low pensions, higher tax burdens on workers, and slower economic growth. Age reduction is also reflective and/or harbors sentiments of age discrimination at the workplace and the public space (Gough, Adami and Waters, 2008;Quadagno, 2014), which is pushing people to maintain a youthful appearance (Quadagno, 2014), utilizing anti-ageing products. Thus, connoting an adaptation mechanism for perpetrators.…”

“…The key predisposing factors to age reduction on paper entail the prestige attached to the given positions in work organizations in society (Ferguson, Strauss and Vogt, 2005;Gough et al, 2008), weakening of traditional social support system (Aboderin, 2006;Dovie, , 2019bTonah, 2009) albeit remote, the lack of planning culture, poor time management and poor resource management (Dovie, 2017).…”

“…As much as possible, all these are significant concerns about adequate income during retirement is a crucial factor that influences many individuals when choosing an age to retire. Research has shown that finances are the most influential single predictor of the decision to retire and that people are more likely to leave the workforce if they can financially afford to retire than if they cannot (Beehr, Glazer, Nielson, and Farmer, 2000;Gough et al, 2008;Nielson and Farmer, 2000;Snyman et al, 2017).…”

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“…Meanwhile, Gough et al (2008), in a study on the relationship between pension reforms, retirement age, pay and decision had concluded that in both countries Italy and the UK, high income earners retired relatively early. On the same note, the lowest income earners group tend to retire later.…”