Traditionally, retirement was the pot of gold at the end of the rainbow. You worked for forty-plus years in the knowledge that once you hit retirement age, you could kick back and relax and enjoy time pursuing your hobbies or with family and friends.
This view of retirement has been turned on its head, first by the Covid-19 pandemic when thousands chose to or were forced to retire early, and then by the current cost of living crisis, which is forcing retirees to reassess their options and return to work to make ends meet.
What caused the great retirement during the Covid-19 pandemic?
Recent Labour Market data shows that adults over 50 years are driving the increase in economic inactivity. From May to July 2022, there were 386,096 more economically inactive adults aged 50-64 years than in the pre-coronavirus pandemic between December 2019 and February 2020.
This rise in economic inactivity has been driven by people experiencing long-term sickness and students. This increase in economic inactivity for people over 50 years has bucked a historical trend seen since records began in 1971.
Retirement was the most frequently given reason in the Over 50s Lifestyle Study for leaving work during the Coronavirus pandemic. However, the study also found that 82% of people who had lost or left their job during the pandemic had yet to return to work.
However, the majority (77%) of adults aged 50 to 59 years said they left their previous job sooner than expected compared with 57% of adults aged 60 years and over.
Among those who have not returned to work, those who left work since the coronavirus pandemic were more likely to have increased worries around finances, such as the cost of living increasing (52%), lack of income or savings (26%), and money (32%), than those who left work before the coronavirus pandemic (44%, 21% and 25%, respectively).
The cost of living crisis is driving retirees back to work
Since the start of the war in Ukraine and the impact this has had on global economies, many sectors of the population have had to face the unpalatable truth that making ends meet may be difficult for the foreseeable future.
This has been most keenly felt by retirees and those who took the opportunity to retire early or lost their jobs during the coronavirus pandemic.
Data from the Office of National Statistics indicates that there are now more people aged 50 and older in work or looking for work since before the pandemic. Their analysis shows there was an increase in economic activity (people working or looking for work) of 116,000 among the over-50s in the past year.
Experts say that in-depth research indicates this is driven by people unretiring rather than people working longer hours.
Stuart Lewis, Chief Executive of Rest Less, a digital community for the over-50s, said, ‘People who thought they could retire comfortably during the pandemic are having to unretire and find work again to bring in extra income and top up their pensions while they still can.’
He added, ‘Increasing numbers of retirees are feeling poorer than they’ve felt before, with consumer confidence at a record low and purchasing power eroded on a monthly basis. All this is driving the trend of unretirement.’
Volatile financial markets, soaring energy costs, and inflation at a 40-year high are all causing significant fear and uncertainty among retirees.
Caroline Abrahams, the charity director at Age UK, said it was no wonder that significant numbers of retired people were “scrambling to return to work in an effort to shore up their finances against the storm”.
She added, ‘Carefully laid retirement plans, which looked economically sustainable a year ago, are now shot to pieces, and that’s a huge disappointment if you’ve been looking forward to a rest and the chance to enjoy yourself after many years of working.’
This was echoed by Ros Altmann, the former pensions minister and Conservative peer, who said the government was wrong to remove the promised protections from pensions. ‘The fear of inflation has caused huge anxiety and driven some to return to work even if their health may not be up to it.’
What problems do over-50s face when returning to work?
According to a recent report, The Unretirement Uprising, the UKs over-50s expect to face age discrimination when searching for a new job.
- Two-thirds of over-50s predict age will work against them in the recruitment process
- 70 per cent feel it is challenging to start a new career over 50
- Almost a third (30 per cent) of retirees felt forced to retire
The UK is currently contending with its biggest talent shortfall on record, and over-50s, who could inject £20 billion into the economy if they were in work, are feeling forgotten.
The report calls for employers to invest in age diversity like they would other diversity and inclusion metrics. Additionally, the report also shows:
- 47% of employees want flexibility from an employer
- 32% work for a sense of fulfilment and purpose
- 21% would select an employer based on their age policy
- 30% of those that have retired felt forced to do so
- One in five has been overlooked for promotion due to age
In our article Generational Hiring: Why is it essential? We focused on the benefits of generational recruitment.
- Hiring generationally gives you access to people from every generation who can influence how you market to different population segments.
- Younger generations have energy, a fresh perspective, and an enthusiasm to learn. Older generations have a wealth of experience, which can often be crucial if your business encounters problems.
- Recruiting a diverse range of candidates helps you achieve a happy, productive workplace and attract top talent in a marketplace that lacks great candidates.
Given that in July 2019, according to Pew Research, Baby Boomers were the second largest cohort in the global workforce, numbering 72.1 million, attracting retirees to your company could pay dividends for cross-generational working and ensure you have a happy and productive workforce.
Additionally, many of these older workers have a wealth of experience and skills that could help you close the skills gap in your organisation and allow you to invest in upskilling your workforce to mitigate the shortage of available talent.
Do you need help recruiting retirees who want or need to return to work?
Call us on 01252 624699 or email email@example.com for more information.