In the past five years, over one in ten staff aged over 50 have disappeared from the workforce after being made redundant, a new study warns.
Among the 177,000 over 50s made redundant on an annual basis over the last five years, 20,000 are estimated to have left the workforce entirely, a new report conducted by Legal & General Retail Retirement and the Centre for Economics and Business Research shows.
This amounts to more than one in 10 older workers being phased out of the workforce entirely after losing their job.
Among the over 50s experiencing redundancy in the past five years, nearly two-thirds (62 per cent) felt that their age was a contributing factor in this decision.
Between 2007 and Q2 of 2021, those aged over 50 have been nearly a fifth more likely (17 per cent) to face redundancy compared to staff aged under 50.
This has meant that close to two-fifths (39 per cent) of older workers who were made redundant in the past five years have had to change their retirement plans.
The same was also seen among those who experienced a reduction in their working hours (34 per cent) or had their salary reduced (33 per cent).
In addition, older workers were shown to have one of the lowest rates of unemployment due to their exit from the labour market following redundancy, with 2,000 of 15,000 staff leaving the workforce each month after losing their job.
Andrew Kail, CEO, Legal & General Retail Retirement, argued that the disappearance of older workers presents a “serious challenge to employers” due to losing both the fastest growing employee population and the wealth of experience older staff have.
The report also investigated the financial impact this could have on staff aged over 50, with these workers expected to save £29,000 less for retirement than the average employee aged 50+.
For employees over 50 who have experienced one or more of reduced hours (9 per cent), a salary cut (7 per cent), furlough (12 per cent) or redundancy (8 per cent), an annual reduction of £3,100 is estimated.
Andrew Kail continued to state:
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.
*This research has been outlined in Legal & General Retail Retirement and the Centre for Economics and Business Research’s new report “Working Late: Over 50s in the Labour Market”, published in November 2021.