Unemployment for over 50s reaches a record low as more put off retirement

Friday 19 September 2014

Saga's director of communications Paul Green said "Today’s figures are great news for the UKs younger and older workers, and in fact our economy as a whole.

Unemployment for over 50s reaches a record low as more put off retirement

Many older people are continuing in employment for social reasons and this has to be good, however there are also some that have to continue working in order to boost their retirement funds.  Saga's latest research of more than 9000 over 50s shows that 55% have had to change their retirement plans in the past five years, and one in six have even been forced to put off retirement indefinitely."

The UK-wide unemployment rate (for persons aged 16 and over) during May– July 2014 was 6.2%, the lowest since the three months to November 2008. The Saga Generations Employment Report shows:

  • The unemployment rate for those aged 50-64 was 4.0%, falling 0.8 percentage points from one year previously and the lowest since the three months to January 2009.
  • There are clear regional differences across the UK in the employment prospects for those that are aged 50 and above.
  • Figure 3 illustrates the regional employment growth for workers are 50 or older. While the number of people aged 16 or older employed in the UK grew 2.6% from one year ago, the number of people employed aged 50 or older grew 4.1% over the same period.
    • The growth in employment of those aged 50 or older outpaced the overall growth across most of the regions over the last 12 months.  
    • London and the South East led this rise in employment with annual increases of 6.3% (+57,000) and 7.0% (+94,000) respectively.
    • However, the North East and Wales have seen employment of the over 50 age group fall over the past 12 months.
    • The North East in particular displays a sharp contrast to the picture seen at the national level. While overall employment growth in the region was 1.9%, employment of those aged 50 or older actually contracted slightly, falling 0.3% from the level a year ago.
  • Figure 1 illustrates that the contribution of the over 50s to the job market has been steadily rising. The total number of workers in the UK grew by 5.8% between the start of this Parliament in May 2010 and May– July 2014, with employment for the over 50s rising faster than for younger workers. Over this time, the number of workers aged:
    • 65 or older has risen from 800,000 in three months to May 2010 to 1.103 million over May– July 2014, a very pronounced rise of 37.9% or 303,000 employees.
    • 50-64 has risen from 7.289 million in May 2010 to 7.981 million over May– July 2014, an increase of 9.5% or 692,000 employees.
    • 16-49 has increased by 3.3% or 684,000 employees, from 20.841 million to 21.525 million.  
  • The number of workers who are 50 or older has been rising steadily. At the start of the current Parliament in May 2010 some 8.089 million UK workers were 50 or older. That figure had risen to 9.084 million over the three months to July 2014.
  • Figure 2 illustrates that the over 50s’ share of UK employment is continuing to rise. Over the three months to July 2014, we calculate that:
    • 70.3% of all employed people were 49 or younger, down from 70.7% one year previously.
    • 26.1% of all employed people were in the 50-64 age bracket, up from 25.9% one year earlier.
    • 3.6% of all employed people were 65 or older, up from 3.4% 12 months before. 
  • On closer inspection, the data give more cause for concern. Both the number of people aged 16-64 considered inactive because of retirement and the economic activity rate of the over 65’s reflect a falling number of retired citizens.
  • Figure 4 shows that the numbers of women aged 64 and below that are officially classified as retired has been falling considerably over recent years, with 207,000 less women under the age of 65 classified as retired in the three months to June this year compared with the three months to April 2010, when changes in the state pension age for women began.
  • This fall has not been matched by a similar fall in the number of retired men in the age group, just 8,000 fewer men under the age of 65 were classified as retired in the three months to June 2014 compared with the three months to April 2010. This suggests that the fall is being heavily driven by the changes being made the state pension age for women that began in April 2010.
  • However, changes to the retirement age cannot account for all of the change seen in the number of people retired over the past few years. It is unfortunately the case that many over 50s may have chosen to continue working, postponing retirement, not because they wanted to, but because economic necessity forced them to. Falling living standards – caused by low interest rates, subdued pension returns and elevated utility price inflation – may have forced thousands of over 50s to retire later or come out of retirement.[1]

 

 

 

 

 

 

 

 

 

 

 

 

 



Ends

[1] See: Gustman, Steinmeier and Tabatabai (2010); Goda, Shoven and Slavov (2010) and Banks, Crawford, Crossley, Emmerson (2012).

 

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