The employment rate for 50 to 64-year-olds is not yet back to pre-pandemic (2019) levels, although it has increased over the past year, according to newly released Department for Work and Pensions figures.
From 2019 to 2022 the employment rate of older adults decreased each year from a record high in 2019 of 72.5% to 70.7% last year, the study found. Since then, the employment rate of people aged 50 to 64 years has increased by 0.6 percentage points to 71.3%, though this increase is not considered to be statistically significant.
One commentator called the economic inactivity rate for the age group “stubbornly high”.
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Over the long term, the DWP stated, the employment rate of people aged 50 to 64 years has generally been statistically significantly increasing. The employment rate increased by four percentage points in the past 10 years.
A narrowing of the employment rate gap between people aged 35 and 49 years and 50 to 64 years, was identified. This had decreased in the past year, from 15.1 percentage points in 2022 to 14.2 percentage points in 2023. This was because of a decrease in the employment rate of people aged between 35 and 49 years and an increase in the employment rate for those aged 50 to 64 years.
A significant gender split was revealed, with the employment rate of women aged 50 to 64 years with no qualifications being 20.5 percentage points lower than that of men of the same age with no qualifications. Whereas there was only a 2.5 percentage point difference in the employment rate of men and women for those with degree-level education, the average age of exit from the labour market has decreased for both males and females over the past year.
This year the average age for men to leave the workforce was 65.3, the same as the male average age of exit in 2019 and 2020. Women have left the workforce at 64 years of age in 2023 but the inactivity rate this year still remains higher than the pre-pandemic rate which was 25.5% in 2019.
Between ages 65 and 66 the employment rate decreased by almost 10 percentage points and the inactivity rate increased by a similar proportion, found the DWP.
Participation rates
Catherine Foot, director of insights at savings and retirement specialist Phoenix Group, said it was concerning that economic inactivity among over-50s remained “stubbornly high”. She said the new figures revealed workplace participation rates among this group were “much lower than we can afford, as the economy continues to miss the vital skills and experience provided by this group”.
The trend has serious implications for the future prospects of today’s over-50s” – Catherine Foot, Phoenix Insights
Long-term sickness or disability continued to be among the most common barriers to remaining in work, said Foot. “Of the 3.5 million people aged between 50 and 64 who are economically inactive, two in five cite long-term sickness and disability as their primary reason for not looking for work. This figure rises to three in five when considering the 460,000 people within this group say that they are willing or would like to work.”
Foot said the trend had “serious implications for the future prospects of today’s over-50s, as they will have less time to build up their savings while in work and may end up without enough income to live on in retirement.
“It is clear that employers must do more to recognise the needs of over-50s, providing more flexibility and better working conditions to reconcile work, family, and caring responsibilities, along with comprehensive sickness absence policies, to ensure as few people as possible feel unable to remain in work.”
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