Ill health not the driver of rise in older workers’ economic inactivity

The Institute for Fiscal Studies (IFS) has said ill health is not the main reason many older people have dropped out of the UK workforce since Covid.

Its analysis suggests that many economically inactive older workers with long-term health issues had already retired before the pandemic hit.

While it says that it is tempting to conclude from top-line data that deteriorating health amongst the older population has been the key reason for higher levels of economic inactivity and lower levels of employment, a closer look at the data suggests that two different things have been happening. One is a growth in ill health among the non-working population and the second is increased levels of inactivity driven in large part by people leaving work for non-health related reasons – in particular because they have decided to retire.

The analysis is supported by recent Office for National Statistics [ONS] figures which show those who had left work since the coronavirus pandemic and had not returned to work were more likely to have a physical or mental health condition or illness (51%) than those that left since the pandemic and returned to work (43%).

Among those who have a condition or illness lasting 12 months or more, the ONS said almost one-quarter (24%) said their condition or illness reduces their ability to carry out day to day activities a lot. This was 10% for those that left since the pandemic and had returned to work.

Tony Wilson from the Institute for Employment Studies says the most likely drivers of the rise in older workers becoming economically inactive are people losing their jobs or choosing to leave them and then supporting themselves through pension drawdown, savings or redundancy.

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