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New research predicts the number of over 50s in work will rise significantly by 2040, as will their earning power, but says more needs to be done to tackle the barriers they face at work and at home.
Older people are set to play an increasing role in the economy by 2040, with over 50s projected to account for 37% of the workforce and 40% of total earnings, according to new research.
The research published by the International Longevity Centre to mark their Future of Ageing conference today shows the share of the workforce aged 50 and over rose from 26% in 2004 to 32% in 2018 and could account for 37% by 2040. People aged 50 and over earned 30% of total earnings (£237 bn) in 2018 and this is expected to rise to 40% by 2040 (£311 bn), say the ILC.
The report finds that supporting people aged 50 and over to remain in the workforce could add an additional 1.3% to GDP a year by 2040.
The report also finds the so-called grey pound is having an increasing impact on the economy with households headed by someone aged 50 and over having dominated total expenditure (excluding housing costs) since 2013. The ILC estimates spending by older consumers will continue to rise significantly over the coming decades, from 54% (£319 billion) of total consumer spending in 2018 to 63% by 2040 (£550 billion).
As people aged 50 and over shift their spending towards non-essential purchases such as leisure, the top three growing sectors for older consumers will be recreation and culture; transport; and household goods and services, the report predicts.
According to the ILC’s analysis, tackling barriers to spending by people aged 75 and over could add 2% (or £47 billion) to GDP a year by 2040.
At the ILC’s Future of Ageing conference today, David Sinclair, Director of the ILC, will say: “As the population ages there are enormous economic opportunities, but these are currently being neglected…We’ve become accustomed to hearing our ageing population talked about as a bad thing – but the reality is it could be an opportunity.”
“However, we won’t realise this ‘longevity dividend’ through blind optimism about ageing. Instead, we need concerted action to tackle the barriers to spending and working in later life.
“We need action to make sure our extra years are healthy years, we need accessible high streets and workplaces that are free from age discrimination and we need continued action to ensure that people have access to decent pensions in later life.
“Realising the longevity dividend will require decisive action – of the kind we’ve yet to see from either business or government. For all the talk of baby boomers dominating politics, we’ve yet to see a serious response to the opportunities and this needs to change.”