According to new research from Legal & General Retail Retirement and the Centre for Economics and Business Research, 11 per cent of workers - approximately 20,000 - over 50 years of age, have disappeared from the workforce after being made redundant.
The report - which looks at the experiences of the over 50s - raises serious concerns about the impact of redundancy on the age diversity of the UK workforce. Among the over 50s experiencing redundancy in the past five years, 62 percent felt that their age was a contributing factor.
From 2007 to the second quarter of 2021, the average rate of redundancy among the over 50s has been nearly a fifth higher than for the under 50s, with the study showing that older workers - on average - have been 17 per cent more likely to face redundancy than their younger colleagues.
This has had serious consequences for retirement savings, with those affected saving £29,000 less into their pension pot, reducing the amount needed for a comfortable retirement lifestyle by 18 per cent or £1,900 annually.
Of those employees over 50 years, 9 per cent having experienced reduced hours; 7 per cent a salary cut; 12 per cent furlough and 8 per cent redundancy - it is estimated that they will suffer a reduction of £3,100.
However, despite the redundancy rate being higher, the unemployment rate for over 50-year-olds is inclined to be lower than that of the rest of the workforce. The Office for National Statistics Labour Force Survey finds the reason for this is because more older workers leave the workforce after being made redundant.
Andrew Kail - CEO, Legal & General Retail Retirement - stated:
“The disappearance of the older worker presents a serious challenge to employers. Not only are they the fastest growing employee population but they also have a wealth of experience that UK employers will miss out on if this trend continues. As we all adjust to new ways of working in the wake of Covid-19, where ‘retirement’ will be different for many people, it’s crucial that older workers are not forgotten.
The Government’s planned investment of additional funds to get over 50s back into work is a step in the right direction, but there is much more to be done to promote an age diverse workforce. We are living and working longer than ever before and the reality is, many of us will be relying on working longer to save for retirement. It’s therefore vital that older workers feel protected in the workplace, and not at greater risk of redundancy. As an industry, we also need to encourage people to prioritise saving throughout their working life, so finances have time to grow, enabling retirees to enjoy their desired standard of living.”
A spokesperson from the government stated that their statistics show that there are 250,000 more over 50s on the payroll than a year ago and added:
“Older workers are a huge asset to companies and there are currently almost nine million workers aged over 50 on employer payrolls – an increase of more than a quarter of a million compared to a year ago. Our recent £500m expansion to the Plan for Jobs is helping hundreds of thousands of older workers to retrain, build new skills and get back into work, including through our 50 Plus: Choices offer, the Sector-Based Work Academy Programme and our Job Entry Targeted Support scheme. The government is taking steps to help older workers to remain in work and we know that access to good quality flexible working can help older people to remain in work for longer."
