People who are out of work due to ill health or disability have less than 5 per cent of the wealth of those who have chosen to retire.
Phoenix Insights’ most recent analysis, which examines the over-50s’ lack of economic activity since the epidemic started, was recently published. The survey reveals a sizable income discrepancy between people who choose to retire and others who are economically inactive for other reasons, such illness or caring duties.
According to analysis, the average (median) wealth for people in their 50s to 64s who decide to retire is roughly £1.24m (as assessed based on the total of pension, property, financial, and physical assets). In contrast, the average wealth of those who are unable to work due to illness or disability is merely £57,000, or less than 5 per cent of the wealth of those who have chosen to retire. The average income of people who are unemployed to care for their families is £137,000.
According to the most recent official statistics, there are currently 3,547,000 adults aged 50 to 64 who are economically inactive, which according to further study includes about 900,000 people who have stopped working since the pandemic.
Wealth disparities suggest older workers who are unable to work because of illness or caregiving responsibilities are financially vulnerable and unlikely to be able to afford a “moderate” standard of living in retirement. Many may even find it difficult to maintain the “minimum” standard of living at this point in their lives.
The report found that there are significant regional disparities between the Midlands and the North and London and the South East when it comes to the reasons why over-50s leave their jobs.
For example, 50-64 year olds in Yorkshire and the Humber are twice as likely to have left the workforce early due to sickness or disability compared to those in London and the South East (24% vs 12%). People in London are the most likely to have left the workforce early to look after family (17%).
Phoenix Insights director Catherine Foot says: “Our latest research shows the Government should urgently develop initiatives to meet the challenges of economic inactivity among the over 50s, or risk a worsening financial vulnerability among our ageing population. This should be approached at a local level as there are huge differences in the drivers of inactivity across the UK.
“It’s important not to dismiss economic inactivity in this group as a case of rich baby boomers choosing to enjoy time on the golf course. Stereotypes like this mask real financial and health vulnerability among a group whose successful return to employment will be critical to the UK’s productivity and prospects for economic growth.
“The demographic fact of our ageing population has been hiding in plain sight for decades, warning us that it is critical that we become much more effective at supporting people to stay in good quality work throughout their 50s and 60s. I hope that this focus on reversing economic inactivity will finally help focus minds and action on this very important issue in our labour market.”