The loss of work and income is concerning for retirement outcomes.
The impact of the pandemic resulted in the net loss of 193,000 workers aged over 50, according to the latest analysis from the Office for National Statistics (ONS).
Workers over the age of 50 were more likely to report working fewer hours than usual between December 2020 and February 2021 because of the coronavirus than those over 50, with those aged 65 or over the most likely to say they had worked reduced hours, according to a report ‘Living Longer: older workers during the pandemic’ published by the ONS this morning.
More than a quarter of furloughed employments are peopled aged 50 or over, with three in 10 of those older workers thinking there is a 50% chance they will lose their jobs when furlough ends. The ONS said older people who become unemployed are more likely to become long-term unemployed than younger people.
Before the pandemic, 72% of people aged 50 to 64 were employed, while one in 10 over 65s were working. The decline in employment from December 2020 to February 2021 compared with the same period a year earlier among older workers, was driven by those aged 50 to 54, the ONS said. The employment rate for those aged 50 to 64 fell from 72.6 to 71.1% and for those aged 65 or over, it dropped from 11.5 to 10.4%.
Older workers are more likely to be self-employed and for those aged 50 or over, men are more likely to be employed in manufacturing, construction, wholesale and retail and the motor industry, while older women are more likely to be in health and social work and education.
Becky O’Connor, Head of Pensions and Savings, interactive investor, said: “The untimely loss of work and income for older people spells bad news for retirement outcomes. Older people often plan to supplement retirement income with earnings from paid work for as long as they can continue to work.
“For nearly 200,000 older workers, the pandemic has brought an untimely end to this plan. This could mean greater dependence on pension pots to get by. However, those pension pots might be limited, which could spell trouble for the older years, when working for extra income becomes much harder, if not impossible.”
The interactive investor Great British Retirement Survey 2020 found that many older workers thought the pandemic would mean they would have to continue in paid work for longer. It also found that the number working past retirement age had dropped last year, from 25% to 23%, but a greater proportion of those still working in retirement said it was out of enjoyment rather than need, possibly indicating that those who needed the extra income from work to top up their pension were the most likely to have lost employment income during the pandemic.
Notes to editors
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.