The number of over-50s in employment edged up by 0.6% over the past year, despite the government’s drive to entice older workers back into the workplace.
The latest figures from the Department for Work and Pensions showed the number of people aged between 50-64 in employment rose 0.6% to 71.3%, remaining below the pre-pandemic high of 72.5%.
After years of rising employment among this age group, the pandemic saw a large number leave the workplace as a result of ill health, job losses and many choosing to retire early, with the employment level dropping to 70.7% in 2022.
Richard Carter, head of fixed interest research at Quilter Cheviot, said: “With the state of the economy fast becoming the number one issue as we head towards the start of election campaigning, the Conservative government has its work cut out to boost productivity and has been pulling out increasingly desperate measures to lure this age group back to work as a result.”
Carter said that while the trend for falling employment rates has ended, government incentives, including changes to pension allowances, will “not be enough” to provide the uplift the government is seeking.
Carter added: “Ultimately, these efforts are not working as had been intended and the current government is rapidly running out of time to make meaningful change ahead of the election.”
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said it was “too early” to tell whether the uptick in employment rate among older workers over the past year will prove a long term trend.
Morrissey said: “A return to the workforce among this group could indicate many things. It could be that the pandemic workplace exit was a short-term blip, or it could be that spiralling prices are forcing many people who thought they had enough to retire to rethink their plans and decide on a return.”
Morrissey said the figures also highlight a wider issue around retirement age.
“It’s a huge positive if people remain in work because they want to and are physically able. The ability to return and rebuild retirement savings depleted during the pandemic is hugely helpful and the growth in part-time work brings extra flexibility. However, given the role that ill health plays in workplace exit we need to consider the prospects for those who can’t keep working and the impact this has on things like state pension age,” she said.
Over two fifths (42%) of those aged 65 were in employment in 2023, markedly higher than the 29% recorded in 2018. The increase has largely been driven by an increase in the number of people choosing to work part-time between 50 and 64 years of age. Within this group, women are considerably more likely to be working part time than men, with around three in 10 women aged 50-64 in part time employment in 2023, compared to one in 10 men.
However, the DWP figures revealed a deep disparity between male and female workers with no qualifications. According to the data, the employment rate of women aged 50 to 64 with no qualifications is 20.5% lower than men of the same age with no qualifications compared to a 2.5% gap in the employment rate between men and women with qualifications.
Sarah Pennells, consumer finance specialist, Royal London, commented: “Although there’s been a significant increase in the number of women in work over the last 70 years, the age at which women are stopping working has not changed. However, the age at which women become eligible to receive their State Pension has increased from 60 to 66, which presents a challenge to ensure they have sufficient savings to fund their retirement.”
State Pension research carried out by Royal London shows that while one in five people who are old enough to receive the State Pension rely on it as their only source of income in retirement, almost three in ten women do.
“Women who want to retire earlier than 66 need to have a plan in place so they can do so. However, almost three quarters of women have never worked out how much they’ll need in retirement,” Pennells added.
