People facing retirement fastest growing workforce - ONS

People aged between 60 to 69 will be the fastest growing sector of the workforce over the next 50 years as almost a quarter of people will be aged 65 and over by 2050.

Data from the Office for National Statistics (ONS) published today, 24 June, showed that over half (50.6 per cent) of people aged between 65 to 69 will be “economically active” by 2067, more than double the 22.45 per cent recorded in 2019.

The growth in the number of estimated 60-69-year-olds working is partly due to the rise in women working following the increase of the state pension age from 60 to 65, while it is thought that future economic performance and attitudes to work will also contribute.

Quilter head of retirement policy, Jon Greer, said: “The shape of the population has dramatically shifted over the last few years and the trend of a growing number of older people per working person is one that seems as inevitable as the aging process itself.

“Projections from the ONS shows that nearly a quarter of the population (24 per cent) will be 65 or older by 2042. This has substantial implications on the economy and the state of the nation’s finances.”

The number of 65 to 69-year-olds will have increased by 40.34 per cent from 1992 to 2067. Economic activity for the over 65s has grown from 5.59 per cent in 1992 to 10.6 per cent in 2018.

“While older people are working longer it is by no way decreasing the strain on the state’s finances and an accompanying research article from the ONS shows just how painful this is going to be, particularly because of the amount needed to fund the state pension – a mind boggling £9bn in 2017,” Greer added.

The cost of funding state pension is expected to grow from is 5.1 per cent to 6.1 per cent of GDP by 2042.

According to AJ Bell senior analyst, Tom Selby, it is not yet understood where the spike in economic activity of the over 60s is a “short-term phenomenon” due to the increase in the state pension age for women.

“Given this shift in working patterns it makes sense for the ONS to focus its analysis on economic activity, rather than picking an arbitrary age to determine ‘dependency’,” Selby said.

“Recent data has also pointed to a significant slowdown in life expectancy improvements after decades of unbroken improvements. It is not yet clear exactly what has driven this trend, although it’s possible austerity measures introduced since 2010 have contributed.

“But if – and it is a big if – we are experiencing the end of life expectancy improvements, rather than a temporary blip, it would have enormous implications both for the ONS’ future projections and wider government policy.”

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