Work | The State of Ageing 2023-24

What does the chart show?

• In the two decades leading up to the pandemic (2000 to 2020) the number of people aged 50-64 in employment rose by over 3 million.
• In the same period, the number of people aged 65 and over in employment almost tripled, from 457,000 in 2000 to 1.4 million in 2023.

The workplace does not look the same as it did 20 years ago – and neither does the workforce. Today, there are 4.2 million more workers aged 50 and over in the UK than there were in 2000. This increase is largely due to demographic change, as people born in the post-war baby boom are now in this age cohort. But people in this age group are also more likely to be in work than the previous generation were at the turn of the century. For women, this is in part driven by the increase in state pension age from 50 to 65 between 2010 and 2020 – but also by the greater likelihood of women of this generation to have stayed in work in the middle of their careers than their mothers.

What does the chart show?

• In the two decades leading up to the pandemic, employment rates for those in their 50s, 60s and beyond saw a steady increase. The biggest increase was for those aged 50-64 (rising from 61% in 2000 to a peak of 72% in 2019).
• However, during the pandemic, we saw a dip in employment rates across all age groups. This was particularly pronounced for 50-64 year olds for whom there was an almost two percentage point difference between the 2019 peak and the 2021 dip.
• Since the pandemic, we have seen a complete recovery in employment rates for people aged 35-49 and 65 and over. However, the employment rate of 50-64 year olds has been slower to recover and has still not returned to 2019 levels – it is currently sitting at 71.3%.

What does the chart show?

• The gender employment rate gap halved between 2000 and 2023 for those aged 50-64 from almost 16 percentage points to 8.5 percentage points. This is in part explained by the increase in state pension age for women.
• The employment gap was at its lowest in 2021 at 7.2 percentage points.
• Between 2021 and 2023, male employment rates for 50-64 year olds rose 1.4 percentage points but for women the increase was only 0.1 percentage points.
• Over the same 23-year period, for those aged 35-49, the gender employment rate gap fell from 13.6 to 9.7 percentage points.

What does the chart show?

• The 50-64 year old groups with the lowest employment rates are Bangladeshi (65%), Black Caribbean (68%) and Chinese (70%) men, and Bangladeshi (20%), Pakistani (29%) and Chinese (55%) women.

We also know that:

• Bangladeshi and Pakistani men and women aged 50-64 have the lowest rates of good self-reported health, which might explain some of the difference in employment rates.
• However, racism is also a factor, with racial discrimination in the workplace compounded by age discrimination and vice versa: a correspondence study from Anglia Ruskin University found that a young White British man was three times more likely to be invited to interview than an older Black British women. A TUC survey from 2022 found that two in five workers from minority ethnic backgrounds (of all ages) had experienced racism at work.
• It is also the case that difficulty in converting overseas qualifications to UK equivalents causes barriers to employment, and may trap migrants in low-paid work below their skill level.
• As well as these gender and ethnic inequalities, there is a lot of regional variation in older worker employment – and older workers appear to face larger barriers to work in some parts of the country than in others. Nationally, there is a 14 percentage point gap between the employment rate of 35-49 year olds and 50-64 year olds, but in the North East of England that gap is 19 percentage points.

What does the chart show?

• Most people aged 50-64 (71% of men and women together) are in employment – meaning nearly one in three are not.

We also know that:

• Of people aged 50-64 who are not in work, most are not actively looking for work (‘unemployed’) but are instead ‘economically inactive’ – meaning they are neither in nor looking for work. This may be because they have retired, are prevented from working due to their health, or have an intensive caring responsibility. Over the last year, this group has become particularly interesting to policymakers as enabling older people to get back into work will offer both individual and economic benefits.

What does the chart show?

• “Sickness, injury or disability” is the reason most commonly given by people aged 50-64 for being out of work (1.4 million people altogether; 39% of the economically inactive), closely followed by retirement (1.2 million people; 33%,). A sizeable proportion say they are looking after family or home (500,000 people; 15%). Some who describe themselves as retired may also have a disability or a caring responsibility.
• It is also worth noting that 490,000 people (14%) who are economically inactive – and not actively job seeking – say they would like to work. Most of these – almost 300,000 people – are out of work due to sickness or disability. That shows there is a significant group of people who are already willing to return to the workforce, if the right jobs and support were available.
• But underneath these numbers are significant differences by age, gender and financial circumstance.

What does the chart show?

• Economic inactivity rates – those who are neither in nor looking for work – declined considerably between 2000 and 2023:
  • The inactivity rate of men decreased by six percentage points, from 28% to 22%.
  • The inactivity rate of women declined much more than men’s in that time, decreasing by almost 15 percentage points from 46% to 31%.
• This means the gap between men and women in economic inactivity rates has also narrowed, with a low point of 8 percentage points in 2021. However, since then the gap has re-widened and stands at almost 10 percentage points.

What does the chart show?

• The youngest group of older workers (those aged 50-54) were most likely to stay in work during the pandemic, with only a 0.2 percentage point increase in economic inactivity rates for this group between Q2/Q3 2019 (the last pre-pandemic longitudinal data) and the same period in 2021.
• The over 65 age group has seen the largest increase in economic inactivity, with an increase of 2.6 percentage points, followed by the 55-59 age group (1.2 percentage points) and then the 60-64 age group (1 percentage point).
• Many will have chosen to retire early, but evidence also shows that poor health and caring responsibilities are important reasons for older people falling out of the labour market.

What does the chart show?

• There has been a steady increase in the average age of exit from the labour market. This will, in part, relate to the rising state pension age, especially for women.
• The pandemic was actually accompanied by a slight drop in average age of labour market exit (from 65.3 to 65.1 for men and 64.3 to 64.0 for women), but this has since recovered to pre-pandemic levels.
• Nevertheless, there is a cohort of people who retired during the pandemic who will be younger retirees than previous and subsequent cohorts – and many of them are less well-off as a result.

We also know that:

Analysis from the IFS found that 50-70 year olds who left the workforce during the pandemic were more likely to be experiencing poverty after leaving the workforce than those who retired pre-pandemic, and on average had cut their food expenditure by £60 per week.

What does the chart show?

• Between 2019 and 2022, the total number of people who were economically inactive due to long-term sickness rose by 355,000 from 2.04 million to 2.4 million.
• More than half of this additional 355,000 are accounted for by people aged 50-64. The number of whom are economically inactive due to long-term sickness increased from just over 1.1 million in 2019 to 1.32 million in 2022.

We also know that:

• Of the 50-64 year olds who are economically inactive due to long-term sickness, 41% had five or more health conditions in 2019, increasing to 46% in 2022.
• Those 50-65 year olds who left their job since the pandemic and not returned are over three times more likely to have bad or very bad self-rated health (10%) than those who are still in work and never left the labour market (3%).

What does the chart show?

• Pre-pandemic, just over a third of 50-64 year olds who were economically inactive because of sickness, injury or disability wanted a job and around a third did not want a job.
• Currently, the proportion of people aged 50-64 who are economically inactive because of sickness, injury or disability and would like a job has climbed to its highest level (38%).

We also know that:

Our own qualitative research with older workers with long-term health conditions during the pandemic found that many who had been furloughed or otherwise shifted away from the labour market had valued the new balance it brought to their lives. The shift back to pre-pandemic norms may be related to the cost-of-living crisis starting to bite.

What does the chart show?

• Almost three times as many 45-60 year olds on incomes over £48,000 say they have left or are considering leaving paid work to achieve a better work-life balance or change their lifestyle (30%) as 45-60 year olds on incomes under £28,000 (11%).
• In contrast, three times as many 45-60 year olds on incomes under £28,000 say they have left or are considering leaving paid work due to physical health or disability (24%) as 45-60 year olds on incomes over £48,000 (8%).
• Similarly, three times as many 45-60 year olds on incomes under £28,000 say they have left or are considering leaving paid work due to mental health or stress (15%) as 45-60 year olds on incomes over £48,000 (5%).
• These trends exacerbate socioeconomic and health inequalities.

We also know that:

Research from Phoenix Insights shows that 50-64 year olds choosing to retire have a total median wealth of around £1.25m, which is £500k more than those still working. It is also 20 times more than the £57,000 median household wealth of those aged 50-64 who left the labour market due to long-term sickness or disability.

What does the chart show?

• Among those aged 50-54 who have stopped working since the start of the pandemic, stress (19%) and being made redundant (19%) were the top reasons. Not feeling supported at work (17%) and wanting lifestyle changes (16%) were also very common.
• Among those aged 55-59 who have stopped working since the start of the pandemic, 33% cited retiring from paid work and 20% wanting a change in lifestyle as their reasons.
• For those aged 60-65, almost half (48%) said they left paid work to retire and 16% did not want to work anymore.

What does the chart show?

• Women aged 45-60 are over seven times as likely as men of this age group to have left, or considered leaving, paid work before retirement age due to caring responsibilities for grandchildren or children (15% vs 2%).
• Men aged 45-60 are almost 2.5 times as likely as women of this age group to have left, or considered leaving, paid work before retirement age due to having sufficient household income to support retirement (18% vs 8%).

What does the chart show?

• Pre-pandemic, re-employment rates three months following redundancy were relatively similar for younger and older workers.
• During the early pandemic, older workers were far less likely to be re-employed three months after redundancy than younger workers.
• This gap narrowed towards the end of the pandemic, but more recently has widened again.

What does the chart show?

• Those aged 50 and over suffer worse job outcomes after 24 months than the all-age average of participants in the Work and Health programme. Less than a quarter of 50-54 year olds (24%), just over a fifth of 55-59 year olds (21%), and under a fifth of people aged 60 and over (17%) got a job in this time.
• This follows a clear gradient: the chance of getting a job from employment support declines steadily with age.

What does the chart show?

• The most popular option among people aged 50 and over for engaging with employment support is “online”. This is confirmed by our own co-design work, in which many participants favoured the self-serve, independently accessible front door that an online service can provide. This runs counter to the stereotype that all people aged 50 and over struggle with digital tools .
• A large proportion of people aged 50 and over also selected “Don’t know”. This suggests that the current employment support offer is not particularly well advertised, and/or that many people aged 50 and over have had little to no experience of it.
• Despite recent assertions by government that we should offer employment support through GPs, a very small proportion of people aged 50 and over see that as desirable.

What does the chart show?:

• Cost-of-living pressures are clearly top of mind for many 50-64 year olds who left work during the pandemic and have not returned, with 63% saying they would consider returning for the money and 43% saying they would consider returning as a result of changes to their cost of living.
• More positive reasons for considering a return to work include for the social company or job enjoyment it would afford (47%) and to improve mental health (36%).
• It’s also clear that older workers want a job that works for them, with 42% saying they’d return to work were they offered a job that suits their skills and experience and 37% were they offered a job suiting their lifestyle or other responsibilities. This highlights the importance of employers offering flexible work that appeals to older people who may have health issues or caring responsibilities to balance with work.

What does the chart show?

• A survey of 50-64 year olds who left work during the pandemic and have not returned found that for almost a third, flexible working hours would be most important to them in choosing a new job.
• Just under a quarter (23%) of 50-64 year olds who left work during the pandemic and have not returned want a job with good pay.
• Balancing work with caring responsibilities is also important for 10% of this group.

We also know that:

• For those 50-64 year olds actively looking to return to work,  it is important to many that their new job is in the right location (70%), suits their skills and experience (66%) and offers flexible working (60%).

What does the chart show?

• Men aged 50-64 are more likely to be employed in transport and communication, construction and manufacturing and less likely to be employed in banking and finance and distribution, hotels and restaurants than men in general.
• Women aged 50-64 are more likely to be employed in public admin, education and health and less likely to be employed in banking and finance, transport and communication, and distribution, hotels and restaurants, than women in general.

What does the chart show?

• In all ethnic groups except Chinese, more women aged 50-64 are working in public administration, education and health than in any other sector. In contrast, 38% of Chinese women in this age group work in distribution, hotels and restaurants compared with 31% who work in public administration, education and health.
• There is a relatively even split across sectors for men aged 50-64. Black African men are more likely to work in public administration, education and health and Chinese and Bangladeshi men in distribution, hotels and restaurants than in any other sector.

We also know that:

• Women are much more likely than men to be in caring occupations. This is especially the case for women from Black ethnic groups. Men are more likely to be in managerial occupations than women across all ethnic groups. This is significant because managerial occupations are generally better paid and caring occupations lower paid, therefore contributing to gender inequalities in income and pension savings.

What does the chart show?

• The proportion of workers who are self-employed as their main job increases with age, from 6% of the 16-29 age group to more than half of people aged 80 and over who are working.

We also know that:

• There has been a decline in rates of self-employment since before the pandemic: between 2019 and 2022, the proportion of workers aged 50-59 who are self-employed dropped by 2.4 percentage points and that of people aged 40-49 declined by 2.9 percentage points.
• Self-employed income tends to be more volatile, which can have implications for pension savings.

What does the chart show?

• The percentage of workers of all ages on zero-hours contracts has risen since 2020.
• There has been a 0.9 percentage point increase in the proportion of people aged 65 and over working on zero-hours contracts since 2020.

We also know that:

Among those aged 65 and over, the numbers on such contracts has risen by 1.63 million up to Q1 2023.

What does the chart show?

• Over one-fifth of 18-24 year old workers received job-related training in early 2023 compared to just 15% of 50-64 year old workers.
• All age groups have seen an increase in job-related training since before the pandemic.