More than one in 10 (11%) over 50s have disappeared from the workforce in the past five years as a result of being made redundant, according to research from Legal & General and the Centre for Economics and Business Research (CEBR).
Among the 177,000 over-50s made redundant each year, 20,000 are estimated to have left the workforce.
The Over-50s in the labour market report raises concerns about the impact of redundancy on the age diversity of the UK workforce. Among the over-50s experiencing redundancy in the past five years, nearly two-thirds (62%) felt that their age was a contributing factor in this decision.
“The disappearance of the older worker presents a serious challenge to employers,” said Andrew Kail, CEO of Legal & General Retail Retirement. “Not only are they the fastest growing employee population but they also have a wealth of experience that UK employers will miss out on if this trend continues.
“As we all adjust to new ways of working in the wake of Covid-19, where ‘retirement’ will be different for many people, it’s crucial that older workers are not forgotten.”
In the period from 2007 to spring 2021, the average rate of redundancy among the over-50s has been nearly a fifth higher than for the under 50s.
Age discrimination at work
Despite a higher redundancy rate, according to data from the Office for National Statistics (ONS) Labour Force Survey, unemployment rates for over-50s tend to be lower than the rest of the working population.
This is partly affected by the number of people who leave the workforce once being made redundant. The report found that 2,000 of the 15,000 over-50s made redundant each month on average over the last five years are estimated to have left the workforce.
“The government’s planned investment of additional funds to get over-50s back into work is a step in the right direction,” added Kail, “but there is much more to be done to promote an age diverse workforce. We are living and working longer than ever before and the reality is, many of us will be relying on working longer to save for retirement.
“It’s therefore vital that older workers feel protected in the workplace, and not at greater risk of redundancy. As an industry, we also need to encourage people to prioritise saving throughout their working life, so finances have time to grow, enabling retirees to enjoy their desired standard of living.”
The research also found that 39% of older workers who were made redundant in the past five years had to change their retirement plans. This was also the case for those who experienced a reduction in their working hours (34%) or had their salary reduced (33%). Meanwhile, 15% of those being placed on furlough decided to change their retirement date as a result.
The CEBR research used data from an Opinium survey of 2,000 over 50s in the UK, the ONS Labour Force Survey and the ONS Wealth and Assets Survey.