More Kiwis working beyond pension age

Margaret McCormick with her husband Win. Photo / Natalie Slade

The growing numbers of elderly New Zealanders who are working beyond age 65 have cut the net cost of the country's ageing population.

Statistics NZ said yesterday that the population aged 65-plus had doubled since the early 1980s to 635,200 and was likely to double again by 2040.

But a paper by the University of Auckland's Retirement Policy and Research Centre, published today, says Treasury estimates of the net costs of superannuation in 2060 have been revised downwards from an estimate made in the year 2000 of 9.7 per cent of national income to just 6.6 per cent in the latest revision this year.

Centre co-director Michael Littlewood said a key factor in the reduced net cost was an increase in national income because of spectacular increases in the numbers of elderly people working well past 65.

A quarter (25.1 per cent) of men and 14.8 per cent of women aged 65 and over are now still in paid work, up from just 8.7 per cent of men and 3.4 per cent of women 15 years ago.

Statistics NZ projections show these increases continuing, but at slower rates, to 34.1 per cent of men and 26.2 per cent of women aged 65-plus by 2061.

"When people work they pay taxes and they increase economic output and that all goes to improve the bottom line, gross domestic product," Mr Littlewood said.

Beach Haven grandmother-of-four Margaret McCormick, who turned 81 last month, still works two six-hour days a week for Sandringham textile importer Frost Textiles, where she has worked for 25 years.

"I'm a great believer in keeping the brain working as you get older," she said.

"I can manage around the house doing the garden and the house, and my husband does the lawns and the hedges and everything, and while I can still manage I feel that I'd like to work on."

She is also an active volunteer with the Hillcrest Lions Club and delivered donated clothes yesterday to Grandparents Raising Grandchildren.

"We put on things like the oldies' concert just before Christmas and enter in the Glenfield Christmas parade, anything that needs doing," Mrs McCormick said.

"It's just so wonderful to get the results of giving donations to help people. You feel so good being able to help."

Mr Littlewood said the revised estimate that superannuation would cost a net 6.6 per cent of national income by 2061 was still an increase from 4.1 per cent today.

Health costs are also expected to rise, from 6.5 per cent of national income to 10.7 per cent by 2061.

But Mr Littlewood said the revised figures gave the country time to have a "research-led debate" about all aspects of retirement policy - not just raising the qualifying age to 67 as the Labour Party advocates, but also whether super should be linked to wages or prices and whether some of the cost should be clawed back through tax changes from those still on high incomes after 65.

Waikato University demographer Professor Natalie Jackson said the big increase in the elderly population was only just beginning as the postwar "baby boom" generation reached retirement.

The age structure shows the effects of smaller peaks in the birth rate 20 to 30 years ago, when the baby-boomers' children had babies, and again around the year 2000 when the baby-boomers' grandchildren had babies.