Despite – or perhaps because of – the recession, pensioner employment has increased dramtically over the past few years. In his Telegraph column today, Fraser remarks on this important but largely ignored trend in Britain's workforce. 'A million jobs have been lost since the Great Recession began', he says, 'but the number of pension-aged people in work has increased by 200,000.' Here's that phenomenom in graph form:
Why has this happened? Fraser puts his finger on one important factor:
'Crucially, they pay less tax. A pensioner manning the tills in Tesco will take home 12 per cent more than a working-age colleague on the same salary.'
You see, employees over 65 don't pay National Insurance, and they have a higher personal allowance (£9,940 as opposed to £7,475, and it's £10,090 for over-75s). This means that a 65-year-old on £17,000 a year gets £15,588 of it, whereas a younger worker on the same salary only gets to keep £13,922. That's a big difference in incentive and helps to explain why, when youth unemployment tops one million, the number of pensioners in work is at a record high.