The Covid pandemic saw many over-50s leaving the workforce. Some reduced their hours, switching to part-time roles, while others opted for early retirement and left completely. Government figures show the number of economically inactive people in the workforce has risen markedly since the onset of the pandemic in Spring 2020. In the spring budget, the chancellor emphasised that there are 3.5 million people aged over 50 who are not currently part of the UK workforce. This is a staggering increase of 320,000 compared to pre-pandemic levels.
“The rise in economic inactivity makes it harder to control inflation; damages growth and puts pressure on already-stretched public finances,” said Lord Bridges of Headley, who chairs the House of Lords Economic Affairs Committee, which published a report on this topic in December 2022.
Its findings pinpointed the high number of people in the 50 to 64-year-old age bracket who retired early in the wake of the pandemic as being “the biggest of four factors” that have made it harder for employers to fill the 1.1 million job vacancies that currently exist across the UK.
Without a large number of young workers coming in to replace them, this exodus has left a skills gap that has seen many UK businesses struggling with severe worker shortages over the past two years, partly due to high numbers of people over 50 leaving the workforce. Of the more than 300,000 working-age adults who have left the labour market since the start of the COVID-19 pandemic, nine in ten are older workers aged 50-64. Almost a third of UK firms have said they are experiencing a shortage of workers, according to data released by the ONS.
To help ease the skills shortage, the government has been putting forward plans to encourage the over-50s back into the workplace. Earlier this year it was reported that the work and pensions secretary Mel Stride was considering allowing those aged 50 and above to be exempt from paying income tax in a bid to get them back into work.
In addition to this, the government's 'Mid-Life MOT' plan is due to go ahead, which will provide people in their 40s and 50s with employability, wellbeing and financial advice. Clearly, the government has identified the over-50s as a key age group to filling the skills gap.
This is against a backdrop of approximately 20% of the UK’s workforce expected to be under skilled for their jobs by 2030, amounting to 6.5 million people, according to Oxford College. The same report cites two thirds of businesses in the UK struggling to recruit workers with the skills they need.
At SileverAGe Professionals we believe older skilled, knowledgeable and expert workers who can work flexibly may be the answer to the skills shortage.
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