Millions of older workers in the UK are facing financial uncertainty as they approach retirement, largely due to a significant drop in employment rates as they enter the final years of their working lives, according to a new review by the Centre for Ageing Better.
The charity’s review highlights that age-related biases often underestimate the value and potential of older workers. This results in challenges for older employees in accessing workplace adjustments and limited employment support for older age groups. Consequently, many workers are forced to leave the workforce before they are ready.
The findings reveal a growing “health-related employment gap” that widens with age. Fewer than 60% of people aged 50-65 with long-term health conditions are employed, compared to 73% of those aged 35-49. This shows that people over 50 with long-term health issues are 60% more likely to be unemployed than their younger counterparts.
Despite having similar “work-limiting” health conditions, older workers, particularly those over 50, are far less likely to stay in employment compared to younger age groups. The review also points out that the UK has a significantly higher rate of economic inactivity due to illness among people aged 50-64 compared to Germany, and fares poorly in comparison to France and Italy.
Economic Benefits of Supporting Older Workers
The review suggests that closing this employment gap could add approximately 192,000 older workers to the labor market, boosting the UK’s gross domestic product (GDP) by £13 billion annually, and generating an additional £2.5 billion in income tax and national insurance revenues.
The charity is urging the government to adopt a more age-positive approach to the labor market, replacing current policies that have been ineffective and have led to imbalances and unfairness.
The Centre for Ageing Better recommends the following actions:
The government should set a target to increase the employment rate for people aged 50-64 to 75% by 2030.
Clear performance targets should be established for different age groups within this range for all government-funded employment and health initiatives.
The Midlife MOT pilot program should be restarted and expanded.
The 50 PLUS Champions scheme, offered by Jobcentre Plus, should be improved and broadened.
Specialized interventions should be introduced to help people in their fifties and sixties with health conditions return to work.
The Need for a Multigenerational Workforce
Dr. Emily Andrews, deputy director of the Centre for Ageing Better, stated: “Before the pandemic, the UK’s employment growth was driven by the increasing participation of workers aged 50 and over. This trend has now stalled. For the government to meet its growth targets, health and work initiatives must support people in their fifties and sixties.”
She added that such efforts would complement ongoing efforts to increase youth participation in the workforce, contributing to a strong multigenerational workforce.
Dr. Andrews also emphasized the importance of an age-positive approach. “It’s not the health of workers over 50 holding them back; it’s the failure of employment support and the reluctance of many employers to offer them opportunities. This group should be fully supported to remain in the workforce and contribute to the economy.”
The Economic Opportunity
The review also highlights the significant number of older workers currently excluded from the labor market. More than half of the three million people aged 50-65 who are economically inactive due to long-term illness or disability are not working but would like to. Furthermore, 42% of the 1.2 million people with a long-standing health condition who are not employed, but would like to be, are aged 50 and over.
By raising the employment rate of people aged 50-64 to 75% by 2030, the UK could add £9 billion to the economy each year and increase national insurance and income tax contributions by £1.6 billion.
Achieving this target would require around 125,000 workers aged 50-65 to return to work, which is just one in four people in this age group who are currently out of work due to long-term health conditions but want to work.
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