Many older people who stopped work in pandemic are in poverty, not enjoying early retirement

7 July 2023, 06:55

Many 'early retirees' are in poverty
Many 'early retirees' are in poverty. Picture: Getty/Alamy

By Kit Heren

Nearly half of the people aged between 50 and 70 who left the workforce in the first year of the Covid019 pandemic are struggling with money, research shows.

Listen to this article

Loading audio...

Some 48% of people who quit work in 2020-2021 were in 'relative poverty', which means their household income was below 60% of the median, according to the Institute for Fiscal Studies (IFS).

Millions of working age people in the UK are 'economically inactive', with the assumption often being that many older people stopped working during the pandemic because they were comfortable enough to retire and live off savings.

But the IFS research suggests that many older people who left work in the first year of the pandemic have had to cut their food expenditure by around £60 per week.

They also struggled more with their overall well-being and were less likely to receive a pension than those who had stopped working in previous years.

Read more: 'Britain needs you': Jeremy Hunt calls for early retirees to return to work amid plans to hike retirement age to 68

Read more: Over 50s could be exempt from income tax for up to a year under plans to tempt people back to work

This retired caller says: 'The UK is an ageist society.'

The report also warns that older people who stop working often never get another job, meaning these people may be struggling more in the cost-of-living crisis.

Xiaowei Xu, a senior research economist at IFS and an author of the research, said: "It is often assumed that older people who left the workforce during the pandemic were wealthy individuals retiring in comfort.

"Our analysis shows that those who left in the first year of the pandemic experienced a sharp rise in poverty, despite overall poverty rates falling that year, and also suffered large falls in well-being.

"Some of this group might well be amenable to coming back into the workforce with the right opportunities, and there are signs that some are returning already.

Many elderly people are living in poverty
Many elderly people are living in poverty. Picture: Getty

"If the Government wants to get this group back to work, the success of policies to support older workers, such as the mid-life MOT, will be critical."

Chancellor Jeremy Hunt has previously urged working-age people who retired during the pandemic to get back to work.

In a direct appeal to those that have retired early, the Chancellor said in January that "Britain needs you" as he spoke of the need to "fix" Britain's productivity problem.

Mr Hunt said: "Nor will we fix our productivity puzzle unless everyone who can participate does.

"So to those who retired early after the pandemic, or haven’t found the right role after furlough, I say – Britain needs you."

More Latest News

See more More Latest News

Obit John Mayall

John Mayall, influential British blues pioneer, dies aged 90

A soldier is fighting for his life

British soldier fighting for life after being 'stabbed in frenzied attack outside barracks' - as man, 24, arrested

The 'crazy' welfare system needs reform, former Labour health secretary warns the Government

‘Crazy’ welfare system needs reform, Labour adviser warns Government, as he says ‘force long-term sick into work’

14 passengers made it onto a life raft

At least six dead and seven missing after fishing boat sinks 200 miles off Falkland Islands

Charlotte Dujardin, Britain's joint-most decorated female Olympian, has pulled out of Paris 2024

Britain’s Charlotte Dujardin ‘whipped horse 24 times like an elephant in the circus’, claims lawyer

Roberta Taylor was diagnosed with pneumonia after a fall two months ago

EastEnders and The Bill star Roberta Taylor dies aged 76 from infection caused by fall

Kamala Harris raises her arms against a backdrop of US flags

Kamala Harris kicks off campaign for US president with rally in Wisconsin

A line of traffic against a red background

Wildfires send thousands fleeing from Canadian Rockies’ national park

Former Home Secretary James Cleverly has announced he will stand in the Conservative Party leadership contest.

Former Home Secretary James Cleverly announces Tory leadership bid

Kamala Harris

‘A fight for the future’: Kamala Harris vows to take on Donald Trump’s ‘extremist’ agenda in first campaign rally speech

Police help a man out of a police vehicle

Man faces murder charges after mass shooting in Croatia nursing home

Labour has seen off a potential rebellion on the two-child benefit cap

Keir Starmer suspends seven rebel Labour MPs who voted to get rid of two-child benefit cap

Spain and Manchester City star Rodri has been charged by UEFA after he chanted about Gibraltar during a Euro 2024 victory event.

Manchester City star Rodri charged by UEFA over Gibraltar chants during EURO 2024 celebrations

President Joe Biden boards Air Force One at Dover Air Force Base, in Dover, Delaware

Joe Biden seen for first time since quitting presidential race as Democrats rally behind Kamala Harris

Robert Hammond, 47, faced a "surging mountain of debt and financial pressures"

Mortgage broker who murdered his wife to cash in on her life insurance and pay off £300,000 debt jailed for 24 years

Michael Marmot said the cap was 'almost a form of eugenics'

Two-child benefit cap amounts to eugenics, public health expert claims ahead of MPs' vote