What is driving the Great Retirement?


What is driving the Great Retirement?

Walking Group

Why have they left and how do we get them back?

That's the question at the heart of the Chancellor's Autumn Statement announcement of a review into economic inactivity, which will determine what the Government can do to support more people not currently actively seeking work to re-join the labour market.

Economic inactivity is a major issue in our economy at the moment. And a large part of the group who have left work since the pandemic and aren’t yet trying to come back are people aged over 50. It’s a phenomenon that has been dubbed ‘the Great Retirement’. We currently have around half a million fewer people working over 50 that we would have had if pre-pandemic trends had continued. And one thing that is so curious about this phenomenon, is that it’s pretty unique to the UK. Most other major economies have seen their employment rates bounce back after the pandemic, including for workers over 50.

What’s the explanation?

Well, 16% of 50-64 year olds that have left work since 2019 give long-term sickness or disability as their main reason for being economically inactive. 57% of those in their late 50s say they are not looking for work because they are retired or looking after family. This rises to 68% among those in their early 60s.

Our recent research shows that the UK stands out compared to Germany and the USA as having significantly more negative attitudes towards work, with our views towards work in the UK having been changed more profoundly by the pandemic. Our polling also suggests that higher levels of financial comfort among this age group in the UK may have enabled increased levels of economic inactivity, with this effect being particularly pronounced for home owners

Following on from this first report, we’re now conducting further data analysis and running focus groups in the UK, US and Germany to try 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.

What’s the answer?

For some, the answer will lie in improving support for working with long-term health conditions and working alongside caring responsibilities. Employers urgently need to get serious about offering flexible working that that fits alongside other pressures and priorities in people's lives. For others, they feel they can afford to take early retirement, and efforts will be needed to ensure they have access to good information and advice to judge if that is true.

It may be that cost of living pressures and other experiences of the downsides of early retirement will push some people back into work. But people over 50 often face systemic, structural barriers to returning to work, with many reporting having experienced age discrimination and prejudice. Phoenix Group is proud to be one of the founder signatories of the Centre for Ageing Better’s Age-Friendly Employer Pledge, because we recognise that being a great employer for people of all ages is the best way for us to attract the best talent to our business.