‘Unretirement’ up slightly in flat economy

The number of people who are economically inactive has fallen in the last quarter, mainly due to older people coming out of retirement, according to the Office for National Statistics.

Its  figures for August to October show economic inactivity fell by 0.2% on the quarter to 21.5%. This was driven by people aged 50 to 64 who had retired early. Employment is up by 0.2% on the quarter to 75.6%, but still below pre-pandemic levels. Self employment is down, while the number of people who have been unemployed for up to six months has risen by 0.1% on the quarter. This is spread across all age groups.

In September to November 2022, the estimated number of vacancies fell by 65,000 on the quarter to 1,187,000 due to economic uncertainty. Despite this, the ONS says the number of vacancies remains at historically high levels.

Growth in average total pay (including bonuses) and regular pay (excluding bonuses) among employees was the same at 6.1% in August to October 2022; for regular pay, this is the strongest growth rate seen outside of the coronavirus pandemic period.  Average regular pay growth for the private sector was 6.9% in August to October 2022 and 2.7% for the public sector. In real terms (adjusted for inflation) over the year, total and regular pay both fell by 2.7%.

Tony Wilson, Director at the Institute for Employment Studies, said the statistics were “broadly flat overall”, with employment still below pre-pandemic times and economic inactivity more than half a million higher than before the first lockdown. However, he said there were growing signs that the labour market is starting to slow down with redundancies, despite being low, starting to creep up.  He added that there are things that can be done to boost employment by reaching out to people who are not engaged with Jobcentre Plus.

He stated: “We need to do far more to broaden access to support for more of those who are out of work and want a job, and particularly those who have been out for more than a year. This means improving access to Jobcentre Plus and to programmes like the Restart Scheme, and bringing forward planned investment in the Shared Prosperity Fund. Employers need to do far more too, particularly to make work more flexible by default and to recruit in different ways.”

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