The good news is we are going to work longer for less pay It was never meant to be like this. When the pension age of 65 for men was introduced, life expectancy was 59. Now it is 80. The politicians may shy away from the issue but the economics is brutal: to avoid going bust pensions have to come down and the age of retirement has to go up. Paradoxically, this may be a blessing. The 25 years of growth that started in the early 1980s was fuelled by a big increase in the labour force as women increasingly chose to work. A surge of workers in their 60s and early 70s could have a similar economic impact. This new reservoir of local talent will be a boon for domestic entrepreneurs and a magnet for foreign businesses. By working later in life, we would also be going some way to restoring the relationship between the generations. Our children are due to inherit debt and environmental damage. An employed older generation would alleviate the former. We are also more likely to be happy if we continue to work. As the psychologist Mihaly Csikszentmihalyi has revealed, we are best off when challenged in ways that play to our strengths. Some achieve this in retirement. However, for many, the loss of direction means that they start to miss the workplace. The elixir of retirement can turn toxic. Even if we did appreciate that we'd be happier by continuing working, there is one significant problem. Most of us assume that the more experience we have, the more we're worth and so the more we should be paid. It's a comforting thought, only it isn't true. Just as our value tends to increase in our first 25 years of employment, in most walks of work it decreases thereafter. This is why incomes are highest for people in their 40s. After that we're simply worth less. The traditional way out of this conundrum has been early retirement and a healthy pension. Not for much longer. We are going to work for more of our lives and we'll be paid less for it. Counter-intuitive though it sounds, this could be good news not only for business and our economy but also for our children and ourselves - but maybe not for cruise liners. Octavius Black is CEO of the Mind Gym