Cost of living crisis prompting over-50s in UK to seek work, thinktank suggests
People in their 50s and 60s are re-thinking their decision to take early retirement after being made poorer by Britain’s cost of living crisis, a thinktank has suggested.
The Institute for Fiscal Studies said the squeeze on living standards caused by the highest inflation rate in four decades was the likely reason why more 50- to 64-year-olds were looking for work.
But the thinktank said it was too early to say for certain whether the increase in economic activity seen among older workers in late 2022 was the start of a trend, and urged Jeremy Hunt to includes measures in this month’s budget to encourage more over-50s back into the labour market.
The chancellor is known to be looking at ways of reversing the trend in early retirement after the Treasury and the Bank of England identified the reduction in older workers as a key factor behind labour shortages. Changes to pension rules are among the options thought to be under consideration.
In a report, the IFS said: “The increase in economic inactivity since the pandemic is a focus for the current government, with policies aimed at boosting workforce participation expected in the upcoming budget.
“Most of the rise in inactivity has been among 50- to 64-year-olds. New data provide tentative indications that the trend may be turning – though it is too early to say for sure – likely reflecting financial pressures from the cost of living crisis.”
Official figures show that in the final three months of 2022 there was a marked pick-up in the number of 50- to 64-year-olds moving out of inactivity and back into the workforce.
The IFS said this was particularly the case for people who had given up work since the start of the pandemic, with those out inactive for less than three years
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