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Older worker in market

Older workers crucial to future of UK economy – new report calls for greater equality and opportunities for over 50s in the workplace

Working in later life is key to raising tax revenue, reducing welfare bill and promoting financial independence in retirement, our new report shows.

With 1 in 4 people aged between 50 and state pension age out of work, we are calling for greater equality and more opportunities for those aged 50 and over in the work place.

Ensuring older workers are able to stay in good-quality employment is essential to the future of the UK economy and will relieve pressure on public finances, according to a new report published today.

While overall numbers of workers aged over 50 have increased in the last decade (1) – due in part to the baby boomers entering this age cohort and a greater number of women in work – there is still a sharp decline in economic participation rates after the age of 55, and a corresponding reduction in tax income (2). 

The report points out that successive governments have focused employment policies on helping younger ‘NEETs’ (Not in Education, Employment or Training) - despite 1 in 4 older workers being out of work. Older workers who do fall out of work, remain out of work for longer than people of other ages and are more likely to say that they experience age discrimination (3).

A silver lining for the UK economy? The intergenerational case for supporting longer working lives

Read more

Society is failing to realise the tax-raising potential of this age group, the report argues. Official figures show that halving the employment gap between people aged 50 and state pension age and those in their 40s could see income tax and National Insurance receipts rise by 1% (just under £3 billion) and GDP up to 1% (£18 billion) (4).

It could also help to reduce the welfare bill, with £7 billion a year currently being spent on benefits for people aged 50 to state pension age who are out of work (5).

Furthermore, enabling people to work for longer will give them more time to build up vital savings for retirement.

The net effect of these measures would be to reduce pressure on public finances brought about by people living longer, including increased spending on the state pension and health and adult social care.

The report calls for government and employers to support older workers to stay in work for longer, help those who have fallen out of work involuntarily to return and to create workplaces that work for all, irrespective of age. In particular, this means:

  • Access to flexible working hours and workplace adaptations to help people manage pressures such as caring responsibilities and health conditions, which become more prevalent with age (6).
  • Greater equality of opportunities in the workplace. Older workers in the UK experience age discrimination in recruitment and progression. They are less likely to be offered opportunities for development – across the whole of the OECD only Turkey and Slovenia have lower levels of on-the-job training for older workers than the UK (7a). Research shows they are also the most likely to be stuck on low pay (7b) and feel most insecure about their jobs (7c).

Changing workplace practices and creating an age-friendly employment culture is important for today’s older workers, and for younger generations, all of whom will face similar pressures as they age, the report says.

Part of a series of policy option papers being submitted to the Intergenerational Commission, the report also challenges widespread negative assumptions that underpin age bias. In the UK and around the world, employment rates for younger workers are rising at the same time as the number of older workers increases (8a). It also points out that older workers are just as productive and perform as well as in the workplace as younger people (8b).

Patrick Thomson, report author and Senior Programme Manager at Centre for Ageing Better, said:

“Our analysis makes clear how integral older workers are to the future of the UK economy. Being in work is a way of redistributing income via the tax system for all. It reduces the welfare bill and promotes savings and financial independence in retirement. But despite this negative stereotypes towards older workers are still widely held. Ageism and misperceptions of older workers contribute to both employers and employees failing to take early preventative action. Caring responsibilities and health conditions for example tend to increase for many older workers yet many employers don’t offer enough support to help people manage these pressures alongside their working lives, which can cause them to leave work early.

“Older workers offer a solution to the fiscal challenge of our longer lives. We therefore need policy solutions that support and enable this increasingly important segment of the workforce.”

The report also finds:

  • Significant inequalities remain within generations. Low and middle earners are the most likely to have to work beyond state pension age, often because of financial necessity. 1.8 million older lower and middle-income households will struggle to save for retirement. These people are also more likely to work in jobs which impose high physical demands and/or limited control over their working environment – conditions which are detrimental to their longer term health and wellbeing. (9)
  • Generation X face similar challenges to the slightly older ‘squeezed middle aged'. They are most likely to work longer due to financial necessity rather than enjoyment of work, and without adequate support could experience more acute inequalities than current older generations. Generation X are the first generation where the majority are approaching retirement without Defined Benefit pension schemes, who have greater choice in when to retire, and who will feel the full impact of the upcoming state pension age rises. We need to make changes in the nature of work now, in order to ensure that their future is better (10).

Inequalities among older workers are particularly pronounced between men and women in terms of the gender pay gap and pension income. Women are more likely to have taken time out from work than men, particularly to provide childcare. This affects their career prospects and life time earning potential. As a result, the gender pay gap is starkest for older age groups for both full and part-time workers (11).


1. Labour Force Survey A01: Summary of labour market statistics (ONS, 2018)

2. Fuller Working Lives: evidence base 2017 (Department for Work and Pensions, 2017)

3. Centre for Ageing Better / Ipsos MORI 2015, Policy Exchange 2012, DWP 2014

4. Fuller working lives – background evidence, 2014 (Department for Work and Pensions, 201  Using 2013 figures)

5. Fuller Working Lives: evidence base 2017 (Department for Work and Pensions, 2017)

6. Fuller Working Lives: evidence base 2017 (Department for Work and Pensions, 2017)

7a.  Future of skills and lifelong learning (Government Office for Science, 2017)

7b.  The Great Escape? Low pay and progression in the UK’s labour market (Social Mobility Commission & Resolution Foundation, 2017)

7c. British Social Attitudes 33: Work (NatCen, 2016)

8a.  Fuller Working Lives: evidence base 2017 (Department for Work and Pensions, 2017)

8b. Older workers and the workplace: evidence from the Workplace Employment Relations Survey (National Institute of Economic and Social Research / DWP, 2017)

9.  A mid-life less ordinary? Characteristics and incomes of low to middle income households aged 50 to State Pension age (Centre for Ageing Better & Resolution Foundation, 2017)

10. DWP analysis of British Social Attitudes data 2008 to 2015, for the Cridland Independent Review of State Pension (DWP, 2017).

11. ONS, 2018.