Beyond the great retirement: Understanding and tackling economic inactivity amongst the over 50s


Beyond the great retirement: Understanding and tackling economic inactivity amongst the over 50s

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Almost 1 million people aged 50-64 have left the workforce since the pandemic. Why the UK is seeing dramatic changes to workforce participation amongst over 50s is therefore a major concern.

We currently have around half a million fewer people in the workforce aged 50+ than we would have had if pre-pandemic trends had continued. Other major economies have seen their employment rates bounce back after the pandemic, including for workers over 50 but we have not seen this in the UK and we want to explore why.

How does the UK differ?

Our previous report ‘What is driving the Great Retirement?’ explored what is behind the recent rise in economic inactivity amongst 50-64 year olds and showed that the UK stands out compared to Germany and the USA as having significantly more negative attitudes towards work, with the pandemic significantly changing views of UK workers.

Our polling also suggested that higher levels of financial comfort amongst this age group in the UK may have enabled increased levels of economic inactivity, with this effect being particularly pronounced for home owners.

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How do we tempt them back into meaningful work?

Following on from this first report, we have once again partnered with Public First to conduct further data analysis and run focus groups in the UK, US and Germany to get further under the skin of what is behind these new retirement decisions and whether employers could tempt more people over 50 back to the labour market.

We need to understand the recent rise in economic inactivity to outline how to respond and better support employers and individuals in returning back to more meaningful work.  

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What our research has found

  • Those choosing to retire early are significantly wealthier than others, but those who have left the workforce due to ill health or disability or to look after their families are much more financially vulnerable.
  • Owning a home outright is a critical factor in whether people feel able to retire early.
  • Those who have become economically inactive do not disproportionately come from any one industry, or the public or private sector.
  • Where people live makes a big difference to why they are leaving the workforce.
  • Only 12% of respondents disagreed with the statement “older people are left behind by employers”.

How we encourage the government to respond:

Create more flexibility

Respond to the strong preferences over 50s show for being able to work more flexibly.

Work with employers

Take a sectoral approach that recognises the specific reasons people are leaving different industries.

Take a regional approach

Enable Combined Authorities and others working at a local level to tackle the specific drivers of economic inactivity in their region.

Improve people's quality of work

Focus on the importance of job satisfaction for keeping people in work or encouraging them to return, especially for those who feel financially comfortable enough to retire.

Financial and careers advice

Improve the provision of these services by finding new ways to ensure this group have access to guidance about their personal financial security and their options for staying in or returning to work.

Take a long term approach

Improve the experience of work for people below the 50-64 age group, recognising that the reasons people leave the workforce early are a product of issues, such as low job satisfaction or poor health, that develop over time.

Whilst there is no single policy that can effectively respond to the rise in economic inactivity in over 50s since the pandemic, we have identified a number of trends in which a package of policies is needed to address in order to successfully combat this issue.