While young workers have been hardest hit by the pandemic, older workers have seen the impact grow during lockdown, with increasing numbers losing their jobs, according to the Office for National Statistics.
From last October, redundancy rates among those aged 50 and over rose above the rates for other age groups and stayed highest until the end of the February, the period covered by an ONS report published this week.
In the three months to February, employees aged 50 and over were more likely to report working fewer hours than usual, or not working at all, than those under 50, with the biggest effects among those aged 65 and over, the ONS said.
Analysts said the finding had serious implications for the long-term job prospects of older workers, their living standards and pensions, because, as the ONS reported, “older people who become unemployed are more likely to be at risk of long-term unemployment than younger people.”
In its findings on pensions and retirement, the ONS said one in eight workers aged 50 and over had changed their retirement plans as a result of the pandemic. Some 5 per cent planned to retire earlier and 8 per cent planned to stop work later. Those on furlough are most likely to have changed their plans: 10 per cent planned to retire earlier and 9 per cent later.
Behind this division lies a clear split between people who have been able to work from home — generally better-off professional and managerial workers — and those who did not, usually people on lower incomes in manual jobs. Those working from home were more than twice as likely to say they planned to postpone retirement as those who did not — 11 per cent compared with 5 per cent.
These are often not voluntary choices but decisions forced by circumstances, such as a lack of cash for those deciding to work longer or an inability to find a new job for those retiring early.
Sarah Coles, personal finance analyst at investment broker Hargreaves Lansdown, said: “Many older people have been hit hard financially by the crisis, so they want to work longer to make up the cash . . . They may have had to pause pension contributions, or dip into their pot, but either way there’s ground to be made up.”
“Losing your job at this age means a far higher chance of long-term unemployment,” she added. “Some will be retiring earlier purely because they can’t find another job.”
The onset of the pandemic pushed up redundancy rates sharply, with the 16-24 cohort hit the hardest by far. But the redundancy rate for this age group peaked in the summer of 2020, at 17.2 per thousand in the three months to September, before dropping. The rate among other age groups kept rising, peaking only in the autumn. By the October-December quarter, the highest rate was among those aged 50 and over at 14.1.
Redundancy rates dropped steadily for all age groups from late last year, as business activity started picking up, but the figure for the 50 and over cohort remained highest: for December to February it was 9.7 per thousand people, compared with 7.7 for the 16- to 24-year-olds, 4.3 for the 25-34 cohort and 7.3 for those aged 35 to 49.
The pandemic came after years of steadily increasing employment among older people, due to sustained demand for labour and the raising of the official retirement age. In 2019, 72.3 per cent of people aged 50 to 64 were in employment, and around 10 per cent of those aged 65 and over were still working, including in full- and part-time posts.