Workingwise.co.uk’s annual survey was published last week and shows that a high number...read more
A new report finds the UK is more likely than other G7 countries to have over 55s who have dropped out of the workforce, with health being a major factor.
People in the UK who are over 55 are more likely to have left work and not returned than those in other G7 countries, according to a new report.
The latest edition of PwC’s Golden Age Index, which measures how well countries are harnessing the power of their older workers, is based on 2021 data and finds that the UK’s ranking of 21 out of 38 OECD countries remains unchanged to its position in 2016. It says the UK is an outlier among the G7 as economic activity level among older workers has not recovered to pre-pandemic levels, with over 55s driving three-quarters of the rise in total economic inactivity since the pandemic.
It points to high house values, investment income and poor health as the primary reasons for the UK’s performance. The ONS has found that a third of over-50s who quit their job during the pandemic are on NHS waiting lists. New Zealand, Iceland and Japan top the rankings for the highest proportion of economically active over 55s in the labour force.
The report highlights that reversing the trend in long-term sickness amongst the UK population could be one of the key policy levers to bring workers, and particularly older workers, back into jobs. PwC’s survey of 1,000 people, conducted as part of the Golden Age Index, showed that the age cohort that is suffering the most from long-term sickness is the 35-44 age group, followed by the 55-64 and 65+ age groups – meaning health-related concerns and issues are holding back both the current and future generation of golden age workers.
In separate research by PwC for The Times Health Commission, two in five businesses (38%) have seen an increase in the number of employees taking long term sick leave due to mental health-related illness since the pandemic.
The Golden Age Index also notes the role house prices and investment income could have had during the pandemic to lower the employment rate of older workers. Specifically, the analysis suggests that historically a 10% increase in house prices has been associated with a 0.1 percentage point fall in employment rates for 55-64 year olds, all things remaining equal. It says this indicates that positive wealth effects from the rapid appreciation of house prices of more than 20% during the pandemic could have contributed to a reduction in the post-pandemic employment rate of older workers in the UK.
The report also finds significant regional variation in the employment rate of older workers in the UK, ranging from around 57% in the North East of England, to 68% in the South East.
Divya Sridhar, economist at PwC, says: “Our analysis shows that if all regions of the UK absorbed older workers into the labour force to a similar extent as the South East, it would translate to an additional 320,000 jobs. This is equivalent to around one third of UK vacancies. However, older workers in the South East are more likely to work in sectors which allow more flexibility in terms of locations and hours, such as financial and professional services, while those in the North East are more likely to work in the education, health and manufacturing sectors account, which are generally more physically demanding and require more on-site presence. It’s therefore important that future policies for older workers are tailored to reflect the unique industrial mix of each region.”