A lower proportion of older adults are in work than before the pandemic, according to economic labour data out today from the government, although there is a slight increase compared with last year.
- A lower proportion of 50 to 64-year-olds are working than before the Covid pandemic, with 71.3% of older adults between 50 to 64-years-old in employment compared to 72.5% in 2019. This is up slightly from 70.7% in 2022.
- The average age of leaving the labour market is 65 for men and 64 for women, with men retiring at the same age as 2019 and women retiring around four months earlier on average.
- Recent data bucks long-term trends of increasing average retirement ages, where in the last 20 years employment among 50 to 64-year-olds increased from 64% in 2003 to 71.3% in 2023.
- One in five (19.9%) inactive 50 to 64-year-olds stopped working in the last two years, compared to 51.0%, who left their last job over five years ago.
- The most common reason for not working is due to being sick, injured or disabled. 42.3% of 50 to 64-year-olds gave this as their main reason for not working.
Alice Guy, Head of Pensions and Savings, interactive investor says: “The Covid pandemic was a time when many people retired earlier than planned, some due to ill health or redundancy and others due to a change in priorities. The pandemic drop in employment among older workers reversed years of increasing retirement ages and has a knock-on effect on people’s finances. Many may need to dip into their savings or workplace pension early due to retiring earlier than planned.
“The rising state pension age has pushed up retirement ages, but not as high as some policymakers expected. Many people are still retiring before the state pension age, meaning many in their 60s are having to plug the gap before the state pension kicks in, sometimes struggling on a minimum income for a few years.
“There’s a limit to how long many people can carry on working and many people need to retire before the state pension age. Those with physical jobs will find it much harder to work into their late 60s, and many also have caring responsibilities that make full-time work difficult.
“The long-term impact of the pandemic shows how easy it is for an unexpected event to knock people’s financial plans off course.
“If you’re struggling on a low income, then it’s important to check if you’re entitled to benefits. As many as 800,000 pensioners are thought to be missing out on Pension Credit, for example, which tops up pensioners’ incomes as well as potentially opening the door to support with housing and council tax.”
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