To understand the labour market for older workers, you need to stand back and see the wood from the trees

Every month the ONS publishes new statistics on the state of employment, unemployment and economic activity across the country: a blessing and a curse for people who actually want to understand whether things are getting better or worse for workers in the UK.

Every new data release feels like new information – but it can take many months before we really know, in hindsight, whether changes indicate a blip or a trend. 

This month’s data paints a gloomy picture for the economy of a whole: the largest fall in the overall employment rate since 2020, job vacancies down 20% from a year ago, rising unemployment and economic inactivity – all of which could be a sign that a corner is being turned for the worse.   

What does that mean for older workers? According to the latest stats, things aren’t looking so bad – and there’s a chance we’re seeing the start of some positive news on 50+ employment.

But if we step back and take a longer-term look, the full picture gives us at the Centre for Ageing Better plenty to worry about.

From this viewpoint, there are some things that we know are a problem. Workers aged 50-64 have not experienced the same level of employment recovery since the pandemic as other age groups. Whatever economic misery we may have on the horizon, older workers are (in general) less resilient in the face of it.  

Earlier this month, the ONS published its annual update on Economic labour market status of individuals aged 50 and over, trends over time, which explores trends going back to 2019.  

This release shows that, while the employment rate of workers aged 30-49 has fallen since last year, it is still above 2019 pre-pandemic levels in 2023 , it is still above 2019 pre-pandemic levels in 2023. 

This pattern is in marked contrast to that of the employment rates of workers aged 50+. 

In every five-year age band from age 50 upwards (except for those aged 75+), while employment rates may have risen between this year and last, they stubbornly remain below pre-pandemic levels (See graph).  

After a two decade rising trend prior to the pandemic, peak employment of 72.5% for 50-64s was reached in 2019.  

It currently stands at 71% - up by 0.6 percentage points since its pandemic low last year.

However, many of these recent rises are not statistically significant. This year’s figures could be just a temporary blip or they could be part of a trend: it’s too early to tell. 

Nevertheless, although the changes in age-band specific rates are not statistically significant, the 0.9 percentage point fall in the employment gap between 35-49s and 50-64s since last year is. 

The gap now stands at 14.2 percentage points which is still well above the historic low of 12.8 percentage points in 2019. So – some progress, but still a long way to go.  

In its annual release on 50+ workers, the ONS notes that the recent rises in age 50+ employment appear to be associated with increases in part-time and self-employment. 

Some of the growth in employment rates of older workers over the past two decades has been due to increases in the proportion of those employed part-time. This trend has continued through the pandemic and beyond. 

In addition, there was a marked increase in self-employment rates among those aged 50-64 between 2022 and 2023: up from 16.8% to 17.9% at the same time as self-employment rates fell among those aged 35-49.  

But one should be wary inferring that these trends are symptomatic of a general pattern of older workers choosing to and being allowed to work in more flexible ways. 

In fact, 50 to 64 year-olds are less likely to work flexible hours than those aged 35 to 49, with 15.1% of those aged 35 to 49 working flexitime compared to only 12.6% of older adults.

We know that workers in their 50s and 60s value flexible working - for 50+ workers considering a return to work, flexible working was the most important aspect of choosing a new job. 

So it’s worrying to think that they aren’t getting access to it. The rise in part-time and self-employment may illustrate a response to a lack of flexitime, with workers choosing to work part-time or become self-employed to allow more freedom.  

That’s great if it’s what those workers want – but bad if it’s leaving them less financially resilient than they want and need to be. 

Hopefully the recent passing of the Flexible Working Act and Carers’ Leave Act should be the incentive some employers need to talk more about flexible working with all of their current, and future, employees.

For advice on how to talk about flexible working with candidates during recruitment, check out the new Good Recruitment for Older Workers (GROW) toolkit.  

A striking feature of the fall in older workers’ inactivity rates since last year from 27.4 to 26.6% is the changing composition of reasons for inactivity. 

In 2022, 39.1% of the inactive 50-64s were for reasons of sickness or disability, in 2023 the proportion was 42.3%. At the same time the proportion inactive due to retirement fell from 33.4% to 30.9%.

But changes in rates don’t tell the full story. 

Although the inactivity rate fell over the last year, the total numbers inactive increased by 90,000 as the size of the age-group grew.

Of that increase, 77,000 were inactive owing to sickness or disability. 

And although the biggest reason for leaving work among those aged 50-64 is still due to retirement, in the last year, the proportion of those leaving work owing to ill-health rose from 21.9% to 24.1% and the total rose from 522,000 to 541,000. 

All this points to more pressures on welfare spending on Employment Support Allowance for those unable to work before reaching state pension age. 

One way to avert this would be to encourage better access to occupational health which may help prevent older workers from leaving work due to sickness. 

The government currently has a consultation open seeking views on proposals aimed at increasing employer use of Occupational Health Services.

Ageing Better is responding to this opportunity and we hope this eventually leads to greater uptake of support which could give more workers the freedom to choose the right time to continue working until.