Nearly half over-50s who quit their jobs during Covid now live ‘in poverty’, think-tank finds
- Half of 50- to 70-year-olds who left employment in 2020-21 in relative poverty
- Institute for Fiscal Studies suggested people were forced into early retirement
Half the older people who dropped out of the workforce at the start of the pandemic found themselves struggling financially, it is claimed today.
New analysis has found that 48 per cent of the 50- to 70-year-olds who left employment in 2020-21 ended up in relative poverty.
The Institute for Fiscal Studies (IFS) think-tank said the figure is ‘significantly higher’ than the proportion who quit before the pandemic, suggesting they were forced into early retirement by lockdown and health risks.
It will put extra pressure on Chancellor Jeremy Hunt to succeed in his attempts to get large numbers of over-50s back to work by offering them so-called midlife MOTs and apprenticeships for new careers.
A massive 3.5million 50 to 64-year-olds were out of work and not looking for new jobs between November last year and this January, official figures show, a rise of 280,000 on the same period three years earlier before Covid arrived in the the UK.
New analysis has found that 48 per cent of the 50- to 70-year-olds who left employment in 2020-21 ended up in relative poverty (file photo)
It will put extra pressure on Chancellor Jeremy Hunt (pictured outside No10) to succeed in his attempts to get large numbers of over-50s back to work by offering them so-called midlife MOTs and apprenticeships for new careers
Xiaowei Xu, a senior research economist at the IFS, said: ‘It is often assumed that older people who left the workforce during the pandemic were wealthy individuals retiring in comfort.
‘Our analysis shows that those who left in the first year of the pandemic experienced a sharp rise in poverty, despite overall poverty rates falling that year, and also suffered large falls in well-being.
‘Some of this group might well be amenable to coming back into the workforce with the right opportunities, and there are signs that some are returning already.
‘If the Government wants to get this group back to work, the success of policies to support older workers, such as the ‘mid-life MOT’, will be critical.’
Today’s research showed that the share of ‘recently inactive’ over-50s in relative poverty increased by 7 percentage points between 2019-20 and 2020-21, as did the proportion in absolute poverty.
Unless they are able to get back into work, the IFS warned, those who retired long before state pension age at the start of the pandemic ‘will experience persistent low living standards’.
By contrast those who gave up work in the second year of Covid, 2021-22, had higher incomes and lower poverty levels.
As the labour market had recovered from the shock of the first lockdown and vaccines had been rolled out by then, the researchers concluded that ‘those who became inactive in that year are more likely to have done so out of choice’.
A Government spokesman said: ‘We are helping millions, including older workers, to return to the workforce and inactivity has fallen by nearly 300,000. We have committed £70million in back to work support for the over 50s including a new online Midlife MOT launched this week.
‘But financial planning for a comfortable retirement is vital, which is why Automatic Enrolment has transformed pension saving with more than 10.8 million workers signed up to a workplace pension and an extra £33 billion saved in 2021 compared to 2012.
‘We are also supporting proposals to expand this so millions more save earlier, while our free guidance on MoneyHelper and Pension Wise is also helping people make informed choices about their financial futures.’