It’s no exaggeration to say that the coronavirus pandemic changed our lives. One lasting change is if, and how, older people work.
For many senior members of the workforce, especially those over 60, retirement was a moveable goal. Changes to the statutory retirement age, together with financial uncertainty and family obligations, meant that getting retirement help from a financial adviser, taking time to compare over 60s life insurance quotes, and planning for the transition out of the workforce were things people often put off.
But everything changed when coronavirus hit.
Before covid, many of us worked in crowded offices, factories, shops, and other businesses. Government lockdowns, and rapidly improving technology, meant that businesses had to adapt to survive. For the first time, working from home became an option for many people. And, with that, came significant benefits to workers. No commutes meant more free time and less stress. Saving money by not having to pay for travel, work clothing, food, and other things became an indirect pay rise. And many of us found a balance in our lives we didn’t know existed. It’s no wonder so many people chose not to go back to the old ways.
These factors were felt even more keenly among older workers. Fearing for their health and safety, many took the pandemic as their cue to leave the ranks of the employed. It all suddenly made sense: prioritising their personal and family health and well-being became more important as the pandemic hit close to home, with many losing loved ones.
The exodus was helped by a booming financial landscape. As personal pensions, property, and investments reached record highs during the pandemic, older workers took the opportunity to re-evaluate their ambitions. With astute financial planning and a new-found view of the important things in life, many were thrilled to learn that they were capable of early retirement.
Another key driver in the move to retire was the buoyant property market. For those in family homes, downsizing became easier, more affordable, and freed up equity to invest elsewhere. That, coupled with a desire to move closer to loved ones, gave many the push they needed.
The impact on the national workforce is now being noticed. As the Financial Times reported in June 2022, “half a million fewer people were in paid work in the UK in the first quarter of 2022 than before the Covid pandemic struck.” The paper quoted an Institute of Fiscal Studies analysis which said that younger and older workers were responsible for the reduction in the size of the workforce. Among older people, it noted that most 50–69-year-olds were retiring because of a “’lifestyle choice’ reflecting changing priorities and preferences, with relatively small numbers being forced out of work because of redundancy or long-term health problems.”
Interestingly, the Institute noted that educational background, occupation, and public or private sector employment did not matter. Older workers were more likely to leave anyway.
This reduction in the tax-paying workforce could have substantial consequences for the country’s finances. It remains to be seen if the government will take steps to reverse the trend.
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