The number of over 50s in the workplace has fallen since the start of the pandemic according to new figures from the Department of Work and Pensions.
Its figures show the employment rate for those aged between 50 and 64 has fallen from 72.1 per cent in 2020 to 71.2 per cent in 2021.
It says will this 12-month figure is not necessarily statistically significant it points out there has been little change in the employment rate of those aged between 35 and 49. As a result the employment rate gap between these two age groups has seen a statistically significant increase from 12.9 per cent in 2020 to 13.9 per cent in 2021.
The DWP says all age groups have been impacted in the labour market by Covid-19, but it remains to be seen whether the number of over-50s leaving the workforce is a short-term fluctuation caused by the pandemic or the beginning of a longer-term trend.
Previous figures show the employment rate those aged 50 to 64 had been increasing, and the gap between this age group and those aged 35 to 49 had been narrowing.
The DWP figures show that the average age of exit from the labour market for both males and females has fallen over the past year. In 2020 the average exit for men was 65.3 years, decreasing by 0.2 percentage points in 2021. Similarly the 2020 average age of exit from women was 64.3 years. This decreased by 0.3 percentage points in 2021.
The figures show that being sick, injured or disable continues to be the main reason why people in this older age group are economically inactive in labour market. This figure was cited by 36.9 per cent of this group, which equates to 1.3m people, although the number of people stating retirement as a reason for not seeking work was close behind at 35.1 per cent (or 1.2m).
Over 790,000 people aged 50 to 64 are either actively seeking work, or are inactive but willing or would like to work. This figures has fallen from 810,000 in 2020.
Data suggests that while home working may help some older workers stay in the labour market it has not been an option for all and may entrench existing inequalities.
The DWP figures also show among those aged 50 plus, 600,000 job are still furloughed — this equates to around of a third of all workers on furlough.
Becky O’Connor, head of pensions and savings, interactive investor says: “
“Covid has meant that many older workers who need income from employment have less money coming in. As well as affecting their current living standards, this will also affect their ability to continue to put money aside for eventual retirement.
“The hope is that this Covid-related trend will reverse, however that depends on employers re-hiring older workers. But it can be difficult to successfully apply for certain jobs once you reach a certain age.
“It’s really important that older people who both want to and can work have access to jobs, particularly as the state pension entitlement age has risen and so too will the minimum pension age in the coming years.
“It’s also important that those who cannot work, perhaps through health or caring needs, are able to keep their heads above water.
“Pensions are designed to get people through retirement – they might not be enough, after they become accessible in someone’s mid-fifties, to meet financial needs through the end of their working life, too.
“If older people who have lost jobs are now using some of their pensions instead, this could spell trouble further down the line, when they are trying to make their pot last. This makes it even more vital that people have access to information and products that helps them both build their pension through working life and preserve their pension through retirement.
“This data showing longer working lives comes after the introduction of the Health and Social Care levy – which will also hit older workers. So not only do more people have to work for longer, they have to pay tax for longer, too.”
