"The growth in older workers leaving employment because of ill-health is further evidence of the damaging impact of the NHS crisis."
- Brett Hill, head of health & protection at Broadstone
According to the latest data from the Office for National Statistics (ONS), the overall unemployment rate increased until the end of 2020, before dropping close to a fifty-year low in June to August 2022. It has since increased back above its pre-pandemic rate with the unemployment rate for April to June 2023 increasing by o.3% on the quarter to 4.2%. This was driven by people unemployed for up to six months.
Amongst those aged 50 to 64, the average employment rate has been steadily increasing from 57.2% in 1995 to 71.3% in 2023. For this age group, it was at its highest point in 2019 at 72.5% before declining to 70.7% the following year. In the last twelve months, the employment rate has increased by 0.6%, although this increase isn’t statistically significant. For those aged 60-64, the gradual upward trend in employment rates has been statistically significant, particularly amongst women with a 13.4% increase.
The employment rate gap between those aged 35-49 and 50-64 was 14.2% in 2023, a statistically significant decrease of 0.9% in the last twelve months. However, in the last year, there’s been little change for most age bands apart from those aged 60-64 which saw an increase of 1.2% to 55.2%. Employment rate by single year of age shows the impact of State Pension age (SPa) on older adults with the employment rate statistically significantly decreasing as individuals approach SPa. In 2023, at 65 years old, the employment rate was 42%, which then decreased at 66 years old to 32.3%. This trend is consistent with both men and women.
However, despite this increase in employment rates, for those aged 50-64 from 2022 to 2023, there has been a 0.2% increase in unemployment. The unemployment rate for 35-49 year olds followed a similar trend. Notably, the unemployment rate for men aged 50-64 was 1% higher than for women of the same age; this is a statistically significant difference.
Of the 2.1m people aged 50-64 who weren’t working in 2023 (inactive or unemployed) and who had left their employment during the last eight years, 34.2% said they left to retire. Meanwhile, 24% said they left due to health reason and 14.8% because of dismissal or redundancy. Leaving to ‘look after the home or family’ was more likely among women (11.8%) than men (5.4%).
Compared to 2018, there is now a smaller proportion of workers aged 50-64 in full-time employment and a greater proportion working part-time. Likewise, the recent increase in employment rates amongst those aged 50-64 appears to be driven by an increase in part-time work. Women aged 50-64 years old are considerably more likely to be in part-time work, with approximately three in ten women in part-time employment in 2023 compared to one in ten men of the same age. This trend is consistent across all age bands. Meanwhile, the proportion of people aged 50-64 in self-employment increased from 16.8% to 17.9% in 2023 while the proportion of people aged 35-49 in self-employment decreased by 0.4% in that time frame.
This is reflected in the distribution of work hours. Of those aged 50-64, approximately 35% worked more than 40 hours a week, rising to 40% amongst 35-49 year olds. Men aged 50-64 years old were more likely to work longer hours per week than women, with 32% working 40-50 hours compared to 15.4% of women. However, those aged 50-64 were less likely to work flexible hours compared to 35-49 year olds. Women across both age groups were slightly more likely to prefer working from home, with 24.1% of women aged 50-64 opting to work from home compared to 22.8% of men.
Across all industry sectors, employees aged 50-64 have a broadly similar distribution to 35-49 year olds. Approximately one in six employees between the ages of 50-64 (17.9%) worked in the banking and finance sector compared to one in five of 35-49 year olds (19.7%) in the same sectors. The sector with the lowest proportion of people employed in both age groups is agriculture, forestry, and fishing. For women aged 50-64 (24.1%) the most popular employment was in the human health and social work activity sector. This was followed by the education sector (17.3%), and the banking and finance sector (16.3%). This was similar for the highest three proportions of women aged 35-49 years old.
Amongst male employees, 19.5% of those aged 50-64 worked in the banking and finance sector, followed by transport and communication (15.4%) and distribution, hotels and restaurants (12.5%). This age band are also three times more likely to be employed in manufacturing, transport and communications than women, and five times more likely to be employed in the construction sector. These trends aren’t specific to 50-64 year olds with men aged 35-49 twice as likely to be employed in manufacturing, transport and communications, and five times more likely to be employed in the construction sector.
Given the increased employment rate amongst those aged 50-64, economic inactivity has decreased by 0.8% since 2022. Although, it isn’t clear whether this decrease is a short-term fluctuation or the beginning of a long-term trend. From age 50 onwards, economic inactivity usually increases with individual age. This year, inactivity amongst those aged 50 was 12%, increasing to 57.3% at 65, 67.2% at 66, and 75.9% at 67 years old.
The average age of exit from the labour market was 65.3 years old for men and 63.9 years old for women. For men, this was lower than the average age in 2022 (65.4) and the same as in 2019 and 2022. Meanwhile, this year’s average age for women has decreased by 0.3 years since 2022 (64.3).
Commenting on these statistics, Brett Hill, head of health & protection at Broadstone, has said:
“The growth in older workers leaving employment because of ill-health is further evidence of the damaging impact of the NHS crisis. People later on in their careers are more likely to suffer health-related issues and it is clear that they are not getting the support, access to treatment, or preventative treatment that they need to stay in the workforce. Nearly a quarter of workers aged 50-64 are now exiting the workforce because of these health issues.
“It’s an area that employers now need to address urgently to avoid a brain drain. Private healthcare options can help provide employees with better access to affordable support so that they can catch issues earlier, treat them on time and ensure that they aren’t forced into an early retirement – with the financial damage that may entail – as a result.”
Sarah Pennells, consumer finance specialist at Royal London, said:
“The data shows the continued rise in those working up until State Pension age with 42% of those aged 65 in employment in 2023. This was markedly higher than the 29% of workers aged 65 still working in 2018 - which was itself less than two percentage points higher than the 2013 data from 10 years ago. This reveals that although the trend is upward, the increase has been much more rapid in the last five years.
“Although there are many more people aged 65 still working, the increase is mainly from the number of people taking part-time employment between the ages of 50 and 64. Within this group, women are considerably more likely than men to be working part-time, with around three in ten women aged 50 to 64 years in part-time employment in 2023 compared to around one in ten men of the same age.”
Dan Crook, sales director at Canada Life, added:
“New findings from Canada Life also reveal that not only are older workers considering their long-term career options, but 21% of those who have moved jobs in the last five years were starting new careers altogether.
“Employers feeling the impacts of the labour shortage should be focusing their energy on diversity, retaining talent of all ages alongside competing to attract new talent. Benefits such as group life insurance, group income protection, group critical illness cover, and associated support services, are all crucial tools in helping with the recruitment and retention of a diverse workforce, where everyone feels valued.”
