The UK ranks 19th out of 34 countries in terms of its employment rate of older workers, according to PwC’s Golden Age Index.
It lags behind Iceland, which tops the table, followed by New Zealand, Israel and Sweden, according to the consulting company’s annual index, based on a weighted average of indicators including employment, earnings, and training among the over 55s.
PwC estimates that the UK could boost its GDP by around 4.2% (or around £80 billion at today’s values) if its employment rate of workers over 55 could match that of Sweden, the highest performing EU country.
This year’s index aggregates data from OECD countries from 2015, the most recent data available.
The UK has fallen a further place down the list since 2014, when it ranked 18th, and two places since 2013.
PwC estimates that if OECD employers as a whole employed more older workers, this could boost GDP across the economic group by around $2 trillion in the long term.
Within the UK, England has the highest employment rate for 50 to 64-year-olds, at 70.6%, and south-east England is even higher, at 74.5%.
Scotland’s employment rate for the over-50s is 68.8%, Wales is 66.5% and Northern Ireland is 63.6%.
Across the UK, older female workers have a lower employment rate than their male counterparts, at 64.9% for 50-64 year olds compared to 75.4% for males.
John Hawksworth, PwC’s chief economist, said: “While the UK’s absolute performance on our Golden Age Index has improved over time, it’s still scoring below the OECD average.
“As the number of people over 55 continues to grow steadily and life expectancy increases, the UK needs to make it as easy as possible for people to continue working for longer if they wish to do so. This would boost both GDP and tax revenues, so helping to pay for the increased health, social care and pension costs of an ageing population.
“Looking at employment rates for older workers across the UK reveals the areas that need the most focus, as well as symptoms of poor performance. Regions with fewer older workers with university degrees and a larger gap between male and female employment tend to have the lowest employment rates for older workers.”
He added that recent calls by the Government’s new business champion for older workers, Andy Briggs, to increase the number of older people in the UK workforce by 1 million, was “a step in the right direction, but more needs to be done”.
Carol Stubbings, global people and organisation leader at PwC, urged employers to look at flexible working and partial retirement options as a way of keeping older employees engaged.
She said: “Flexible working policies can incentivise women to remain in work longer, so having the right policies in place will increase the employment rate of those over 55 and may help to reduce the gender pay gap which is shown to increase with age.
“The life experience of older workers and the skills they have acquired throughout their career make them hugely valuable to the modern workforce. To build on this leading employers will offer older workers opportunities for development, including reverse mentoring schemes on digital skills and apprenticeships.”
Bottom of PwC’s index is Turkey, which has fallen 12 places since 2003.