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Work | The State of Ageing 2022

Over 50s are being left behind by the post-pandemic employment recovery, and they face many barriers to re-employment.

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The State of Ageing 2022 is an online report with multiple chapters. Below, you can get further detail by clicking on the 'Find out more' buttons and you can hover over graphs to access the data. You can also download the Summary.

Key points

  • The labour market is rebounding from the huge impact of the pandemic, but, among workers aged 50-64, long-term increases in employment rates have been reversed. Today, there are 19,000 more people aged 50-64 unemployed and 228,000 more economically inactive than there were pre-pandemic, in a shift being referred to as ‘the Great Retirement’
  • Older workers were more likely to be made redundant during the pandemic and – once redundant – less likely to be re-employed than younger workers. For those made redundant during the pandemic, workers younger than 50 were almost twice as likely as those aged 50 or over to find a new job within six months.
  • There are major differences in the employment levels of people aged 50-64 across the country. These are especially marked for men: there is a 14-percentage-point difference between the employment rate for men in the North East (66.4%) and the South East (80.4%).
  • Women aged 50-64 are much more likely than men to work part-time: seven times more men aged 50-64 work full-time than part-time, compared with 1.4 times more women. One in four older women workers are ineligible for automatic workplace pension enrolment because they work part-time. This makes women particularly vulnerable to financial hardship in later life, a situation exacerbated by the rise in economic inactivity (neither working nor looking for a job) post-pandemic.
  • The poorest are also the most likely to leave the labour market because of their own ill health: they experience a vicious cycle of disadvantage that increases inequality. 

What needs to happen

Targeted, individualised back-to-work support for over 50s to address the particular challenges this group faces in the labour market, including ageism. This can be achieved by:

  • DWP reviewing standards and performance of employment support for clients aged 50+ in the programmes they fund, to ensure equity across age groups.
  • Using funding allocated to DWP for 50+ employment at the Spending Review to implement – and evaluate – intensive, specialised support for this age group within Jobcentre Plus.
  • Reinvesting underspend in the “Plan for Jobs” programme in support for people aged 50+ who are not engaging with – or cannot access – support via Jobcentre Plus. Underspend should be awarded to providers based on their track record of success with the 50+ cohort, their plans for engagement of those further away from the labour market and mechanisms for employer engagement.
  • Consistent and robust messaging that workers aged over 50 are as entitled to support as younger workers from government, Jobcentre Plus and local commissioners of employment support programmes to employers, job coaches and service providers, and older workers themselves.

The creation of workplaces that support longer working lives by:

  • Legislating without delay for enhanced flexible working rights, carers leave and a single enforcement body. Government should also promote the mid-life MOT model, which gives people a focused opportunity to plan and prepare for their futures.
  • Extending automatic pension enrolment so that it can be triggered by achieving the earnings threshold though multiple part-time jobs and not just a single job; this will benefit anyone working part-time and will be particularly beneficial to older women.
  • Employer action to become ‘age-friendly’; ending bias against older workers when recruiting; supporting staff with health conditions; creating a culture where people of all ages work well together; introducing more flexible working; and encouraging career development at all ages.

 

1. Employment and economic activity: Trends and regional patterns

The number of over 50s in the workplace has grown dramatically over the last 20 years

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What does the chart show?

  • In the last quarter of 2019 (pre-pandemic), there were 33 million people aged 16 and over in work. 

    • 9.3 million of these (28%) were aged 50–64, the highest number of workers in this age group that we have seen in the workplace, and a 50% increase on the last quarter of 2000 (when there were 6.2 million workers aged 50–64).
    • In the last quarter of 2019, there were 225,000 more workers aged 50–64 than there had been one year previously.
    • Between the last quarter of 2000 and the last quarter of 2019 – just before the pandemic – the number of workers over 65 almost tripled, from 435,000 to 1.3 million.
  • The pandemic caused a drop in employment numbers overall. In the last quarter of 2021, there were 450,000 fewer people of all ages in employment than in the last quarter of 2019, though employment levels have rebounded (to 32.5 million) from the low of 32.1 million seen over the November 2020 to January 2021 period.

The pandemic risks putting decades of older worker employment growth into reverse – and the older/younger worker employment gap has grown

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What does the chart show?

  • While there has been a long-term upward trend in the employment rate of people aged 50-64, this has undergone a striking drop since the beginning of the pandemic:

    • In the last quarter (October to December) of 2021 the employment rate of this age group stood at 70.9%, a drop of 1.8 percentage points since its peak of 72.7% at the end of 2019.
    • This corresponds to 112,000 fewer 50-64 year olds in employment (as of October to December 2021) than in the last three months of 2019.
  • In contrast, the employment rate of 25-49 year olds is just half a percentage point lower than pre-pandemic and that of people aged 65 and older is unchanged at almost 11% in 2021.
  • In 2000, there was a 20-percentage-point gap between the employment rates of people aged 50-64 and those aged 25-49. This had narrowed to 12.7 percentage points at the end of 2019 but has widened again to 14.2 percentage points in 2021.

 

The gap in the employment rate of men and women aged 50-64 has narrowed slightly since the start of the pandemic

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What does the chart show?

  • While starting from a much lower base, the employment rate of women aged 50-64 has been rising faster than that of men in this age group – from 53% in 2000 to 69% at its peak in 2019 (pre-pandemic), a 16-percentage-point increase (comparing the October to December quarter in each year).
  • The employment rate of men in the same age group increased by almost 8 percentage points over the same period (from 69% to 77%).
  • That means that the employment gap between men and women halved between 2000 and 2019, from almost 16 to 8 percentage points.
  • With a larger fall since before the pandemic in the employment rate of men aged 50-64 (2.3 percentage points) than women aged 50-64 (1.5 percentage points), the employment gap between men and women in this age group is currently the smallest it has been – at 7.8 percentage points in 2021.

The employment rate of 50-64 year olds varies hugely across the country

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What do the charts show?

  • There are pronounced variations in the employment levels of people aged 50-64 across the country.

    • These are especially marked for men aged 50-64, for whom there is an almost 13-percentage-point difference between those in the North East (67.4%) and the South East (80.0%).
    • The disparity is smaller for women: employment rates for women aged 50-64 range from 63.2% in the North East to 70.7% in the East Midlands.
    • But, for both men and women aged 50-64, employment rates are lowest in the North East.
  • The areas with the largest employment gap between men and women aged 50-64 are the West Midlands (a difference of 10.5 percentage points) and the South East (10.4 percentage points).

There is large regional variation in how the pandemic has impacted older workers

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What does the chart show?

  • The biggest fall (9.3 percentage points) in the employment rates of men aged 50-64 since before the pandemic – and by far larger than for any other region – has been in the East Midlands.
  • For women aged 50-64, the biggest drop (5 percentage points) has been in the West Midlands, followed by Yorkshire and the Humber (3.8 percentage points).

There are now 126,000 more economically inactive men and 102,000 more economically inactive women aged 50-64 than before the pandemic

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Unemployment rates show people who are not working but who are looking for work. Economic inactivity rates are for people who are not engaged with the labour market in any way – they are neither working nor looking for work. People may be ‘inactive’ because they have a caring responsibility or a health condition which acts as a barrier to work, because they have retired, or because they do not think there is suitable work available for them.

What do the charts show?

  • Economic inactivity rates among people aged 50–64 had been falling steadily over time: 

    • The change was particularly pronounced for women, for whom economic inactivity rates fell from 45.3% in 2000 to a low of 29.7% just before the pandemic at the end of 2019.
    • For men, economic inactivity rates fell from 27.3% in 2000 to a low of 20.7% before the pandemic.
  • However, economic inactivity rates have increased again, with the biggest increase (1.8 percentage points) among men aged 50-64.

We also know that:

  • While the number of unemployed people aged 50-64 is 19,000 higher (Q4 of 2021) than during the first quarter of 2020 (292,000 compared with 273,000), the number of economically inactive people aged 50-64 is actually 228,000 higher.
  • More than half of this number (55%) are men: there are 126,000 more economically inactive men aged 50-64 than there were pre-pandemic.

After a long period of largely steady growth in the employment rate of the over 50s, we are now seeing a dramatic increase in levels of economic inactivity among this age group, as well as pronounced regional variations across the country. The data suggests that older workers who have become unemployed during the pandemic may be exiting the labour force altogether and for good.

Although this change has been more pronounced among men than women, the Resolution Foundation reports that the pattern seen for men is consistent with that seen during previous economic crises, but that the increase in economic inactivity for women is worse than has been seen previously.

This unexpected exit from the workforce has significant implications for the long-term financial security and wellbeing of both men and women. But the situation for women causes particular concern. They are more likely to have worked part-time across their working lives – accruing less pension wealth.

It may be that the rise in inactivity we are seeing is not the result of a conscious decision by people in mid-life to leave the labour market. Rather, it may reflect the fact that older people face greater challenges finding work than younger people, including a lack of support. If we want more people in this age group to get back into work – and we do, for the financial security and wellbeing of those involved, and to ensure a more diverse workplace – we have to focus our efforts on engaging those who may feel pushed out of the workplace in jobseeking, and on making sure that the processes they face to find work aren’t biased against them.

2. Worklessness

One-third of people made redundant during the pandemic were aged 50 or over

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What does the chart show?

  • Of those made redundant during the pandemic, one-third were aged 50 or over.
  • Although absolute numbers were lower pre-pandemic, the largest proportion of those made redundant then, too, were aged 50-59 (35% were aged 50 or over).

We also know that

  • Around 200,000 people were made redundant per quarter between April 2020 and June 2021 (1 million in total), compared with only 110,000 per quarter in the year before the pandemic.

Redundant workers aged 50 and over were half as likely as younger workers to be re-employed during the pandemic

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What does the chart show?

  • For those made redundant during the pandemic, workers younger than 50 were almost twice as likely as those aged 50 or over to find a new job within six months (64% vs 35% probability).
  • Pre-COVID, too, older workers were less likely than younger workers to find a new job within six months of redundancy. However, currently, the discrepancy between age groups is larger than pre-pandemic.

People aged 50 and over who are unemployed are twice as likely as the youngest adults to be long-term unemployed, and almost 50% more likely than those aged 25-49. Once unemployed, older people face greater challenges than younger people finding work and have the worst outcomes from employment support programmes. For example, on the government’s Work Programme, which ran from 2011 to 2017, just 21.6% of the over 50s gained a job – the worst result of any group. The pandemic has only served to exacerbate these trends. So it is more important than ever that older unemployed workers be given the sort of support that is provided to young unemployed people. A clear message must be sent to employers, work coaches and jobseekers themselves that people aged 50 and over are just as entitled to support as younger workers. We need targeted, individualised back-to-work support for people in this age group. And employers should look to the principles of age-friendly employment to recruit and retain this valuable workforce. 

The least well-off were the most likely to fall out of work during the pandemic

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What does the chart show?

  • Among those who had been in work in February 2020, the probability of being out of work or unemployed, on leave or on furlough in November 2020 was higher for those who were already finding it difficult to get by (compared with those living comfortably).

Poor health is the main reason people aged 50-64 are out of work

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What do the charts show?

  • By far the most common reason for people aged 50-64 to be out of work is health:

    • Of the almost half a million (459,041) men aged 50-64 who are not in work but would like a paid job, half (229,303) are actively looking for a job, but a quarter of the total (121,395) are not looking because they are sick, injured or disabled.
    • There are also almost half a million (451,302) women aged 50-64 who are not in work but would like a paid job. Almost four in ten of these women (38%) are actively looking for a job but almost as many (131,326) are not looking because they are sick, injured or disabled.
  • Of women aged 50-64 who are not in work but would like a paid job, one in five is not looking for a job because of a caring responsibility; that is, they are looking after their family or home.

Having good enough health or being supported in the workplace in spite of health conditions is key to longer working lives. Better support for people with disabilities and long-term conditions could unlock a large section of worklessness for those aged 50 and over – and often entails just small adjustments on the part of employers.

This is particularly crucial for the poorest in society, who not only have the largest burden of ill-health but are much more likely than wealthier people to be limited in their ability to do their jobs because of their ill-health (likely because of the nature of the work they do). For example, in the latest data from the English Longitudinal Study of Ageing, more than one-third (35%) of the poorest men aged 50-64 have a health problem and are not working as a result, compared with just 6% of the wealthiest men in this age group. The proportion of men who are working but for whom their health condition limits their ability to do their job is seven times higher for the poorest compared with the wealthiest men. Working to tackle the disability employment gap will be key to closing the age employment gap.

The poorest people are the most likely to have taken early retirement because of their own poor health, or that of others

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What does the chart show?

  • The reasons that people take early retirement vary significantly based on wealth. Those with below-average total wealth are much more likely to leave the labour market because of their own ill-health, or the ill-health of others compared with those with above-average total wealth (65% vs 26% gave this as a reason pre-pandemic, in 2018-19).
  • People who are wealthier than the average are more likely to say they took early retirement to enjoy life, or to spend time with their family.

3. In the workplace

There are three times more women aged 50-64 working part-time than men

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What do the charts show?

  • 40% of 50-64 year old women work full-time compared with 66% of men in this age group.
  • Between the ages of 50 and 64, women are three times more likely than men of the same age to be employed part-time: 28% of 50-64 year old women work part-time compared with just 9% of men in this age group.
  • Seven times more men aged 50-64 work full-time than part-time, compared with just 1.4 times more women in this age group.
  • Beyond the age of 65, the proportion of men and women working part-time is almost equal (7% and 6%, respectively) as more men move into part-time work.
  • Full-time employment for people aged 65 and over has increased steadily – from 1% of people in this age group in 1996 to 4% in 2021. For men over 65, the rate has increased from 2% to 7%. For women aged 65 and over rates of full-time employment are lower than for men and have increased from 0.5% to 2% over the period from 1996 to 2021.

We also know that:

Part-time work can provide flexibility and independence and give people the work–life balance that allows them to undertake caring responsibilities, whether for children or older or disabled relatives or friends. In fact, 16% of people aged 50-69 in employment say that they would like to work fewer hours and, for many, part-time work acts as a gradual transition towards retirement.

However, part-time employment comes with significant financial ramifications: pension auto-enrolment is not triggered until people are earning over £10,000 a year and many part-time workers fall short of this threshold. This is the case for around 3 million women (23% of women workers). If the rules were changed to allow the auto-enrolment threshold to be earned from multiple part-time jobs, an additional 80,000 people would qualify – 60,000 of whom would be women. It is estimated that a worker with two part-time jobs, each paying £190 a week, could see their pension savings triple to £297,600.

Self-employment is more common among older people, but rates have fallen during the pandemic

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What does the chart show?

  • Self-employment is more common among people aged 50 and over than among other age groups. In 2021, 17% of workers aged 50-64 are self-employed, compared with 13% of workers aged 35-49.
  • But the proportion (and number) of those who are self-employed in both age groups has declined over the course of the pandemic (from 1.7 to 1.6 million people aged 50-64 and from 1.6 to 1.4 million people aged 35-49).

We also know that:

  • The self-employed have been among the hardest-hit during the pandemic. Whereas one in ten employed people experienced a decrease in pay over the course of the pandemic, this was the case for 44% of the self-employed.

Like part-time work, self-employment can be a positive choice for many, offering control and independence. Self-employed workers with otherwise similar characteristics are almost 2 percentage points more likely to stay in paid work at older ages compared with permanent employees. It is not clear whether this is because self-employed workers need to work longer for financial reasons or they work longer because they enjoy their work more. But it has been suggested that policymakers consider encouraging self-employment among older workers as a way of extending their working lives.

But self-employment comes with financial implications too: nearly a third (30%) of people aged over 55 who are self-employed have no pension wealth, which is double the figure for people in the same age group who are employed (14%). In addition, the median weekly earnings of someone self-employed who is aged 55-64 are £200 lower than the median weekly earnings of an employee of the same age.

People who are self-employed not only miss out on employer benefits, such as sick pay and pension contributions, but are often less able to withstand income shocks. This has been only too apparent during the pandemic: although the government implemented the Self-Employment Income Support Scheme, self-employed workers were much more likely than employed workers to have experienced a decrease in pay during the pandemic, and, in a stark reversal of the trend towards increasing self-employment seen in the UK labour market for at least two decades, the number and share of self-employed people declined. This could have significant ramifications given that self-employment is associated with longer working lives compared with being an employee and is an important job market transition for older workers on the journey to retirement. But people who are self-employed need support to ensure that they have accrued sufficient funds for their non-working lives.

More than half of women aged 50-64 are employed in public administration, education and health

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What do the charts show?

  • Public administration, education and health is – by a very large margin – the most common job sector for women of all ages, as well as for women aged 50-64 specifically. In fact, this sector becomes even more important for the older age group: whereas 46% of women of all ages work in this sector, the proportion rises to more than 52% of the 50-64 age group.
  • There is a much more even distribution of employment across industry sectors for men than for women. But public administration, education and health is also the most common sector for men aged 50-64 (employing almost one in five (19.7%) men in this age group who are working). In contrast, banking and finance is the most common sector for men across all ages.

 

Poor-quality work is an issue for a large number of people in their fifties and sixties, especially poorer workers

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What do the charts show?

  • About half of men (49%) and women (55%) aged 50-69 report that their work is excessively demanding. Around a third (33% and 35% of men and women respectively) report that the efforts outweigh the rewards, and that they lack control (30% and 36%) over their work.
  • When we look at these problems at work according to whether or not someone is materially deprived (that is, they report having too little money to spend on their needs and have had to stop at least three activities as a result), we see a stark socioeconomic divide. The biggest disparity is for effort/reward imbalance, reported by more than half (55%) of people aged 50-69 who are materially deprived compared with less than a third (31%) who are not.

Good-quality work is one of the wider determinants of health; it provides the financial security, connections and satisfaction that in turn are related to our health and wellbeing as we age. Good-quality work is key to retaining people in jobs for longer.

Poor-quality work, conversely, can create stress and poor health – which in turn can push people out of work prematurely. This creates a vicious cycle of entrenched inequality: people with the least financial security, and thus the most need of sustained work, are also more likely to be in work that will damage their ability to keep working.

Workers aged 50 and over are the least likely to receive job-related training

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What does the chart show?

  • The probability of a man having received job-related training in the previous four weeks declines steadily with age: from 21% of 18-24 year olds to 12% of 50-64 year olds.
  • In every age group except the youngest, women are more likely than men to have received job-related training in the previous four weeks. Women aged 35-49 are the most likely but even in this group, it is fewer than one in five (18%).

The opportunity to develop and progress is a key component of good work. Job-related training helps workers to improve their earning potential and satisfaction and helps employers to make the most of their workforce. But the data shows that older men in particular are less likely to receive job-related training than younger people. In the context of an ageing workforce, this represents a major risk to productivity – as well as a barrier to individuals continuing to develop during the latter decades of their careers.

Providing job-related training regardless of age is part and parcel of age-friendly employment practice. Our guide ‘Becoming an age-friendly employer’ offers five key actions that will enable employers to attract and retain older workers. This not only allows older workers to stay in work and ensure financial security for the future but makes good business sense: an age-diverse workforce can offer a larger set of skills; multigenerational workforces may be more stable because employees are not experiencing the same life events at the same time; and there will be a pool of workers to fill the record number of job vacancies.

 

4. Finances: Pensions and wages

The gender pay gap of people in their fifties has narrowed slightly but men still make more than women

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What does the chart show?

  • In 2000, the median weekly wage of men in their fifties was double that of women and, while the gap has narrowed since then, we are still not at parity in 2021:

    • Although women are more likely to work part-time than men – accounting in part for the pay disparity – even for full-time workers, there is a sizeable gender pay gap. This increases with age to a maximum of £135.80 in the 50-59 age group.

We also know that:

  • The gap in median pay between all men and women in their fifties (that is, working full- and part-time) is £241.30 (£659.4 compared with £418.10).
  • The gap in median pay between full-time men and women in their fifties has narrowed slightly, from £159 in 2019 to £135.80 in 2021.

 

The likelihood of having a decrease in pay increased with age over the pandemic

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What does the chart show?

  • Between February 2020 (pre-pandemic) and November 2020, 14% of all adults surveyed reported that their pay had increased; 15% that it had decreased (and 70% that it had stayed the same).
  • But the proportion of adults whose pay had decreased saw a steady increase with age:
    • 7% of people aged 18-29 saw a decrease in pay over this period, compared with 18% of those aged 50-59, 22% of those aged 60-69, and almost one-quarter (24%) of people aged 70 and over.

Overall, the pandemic has had a negative impact on the income of older people. With increasing numbers of economically inactive people, there is reason for concern as to how people can support themselves in later life.

The position of older women is of particularly concern: on average, women aged 50-54 have a life expectancy of 34.7 years compared with 31.8 years for men (see the Health chapter for more on life expectancy). Of those remaining years, men can expect to live 64% in good health while women can expect just 58% in good health. This means that women have more years of life in total and more of those years in poor health than men. That poor health will impact on a woman’s ability to work – as we have seen poor health is the most common reason for falling out of work –and thereby her ability to save for when she is no longer able to work. And, of course, the picture is worse still for the poorest women, who can expect to live to just 51 without disability, followed by 28 years with disability.

Given that women, in general, will have accrued less financial wealth than men during their working lives, because of the higher likelihood of having worked part-time and because of the gender pay gap, these patterns have worrying implications for the ability of women – and particularly the poorest women – to enjoy a good later life.

The State of Ageing 2022

Summary: The State of Ageing 2022

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