Nearly half a million over-50s are quitting Britain’s most important growth sectors early every year – costing the economy £31 billion annually, according to a new report.
The departure of long-serving staff means industries such as defence, advanced manufacturing and life sciences are losing their invaluable experience.
Analysis from Standard Life’s Centre for the Future of Retirement shows an average of 437,000 over-50s left before state retirement age each year between 2019 and 2024. About half took early retirement, 49,000 left citing health issues and 170,000 quit for other reasons, including caring responsibilities or redundancy, according to the think-tank.
Sectors identified as key to the Government’s industrial strategy – which also includes clean energy, creative industries, digital, financial services, and professional and business services – employ 3.4 million staff over 50, the study showed.
Patrick Thomson, head of research analysis and policy at Standard Life’s centre, said: ‘The UK’s economic future will be driven by these high-growth sectors, but relies heavily on the experience of over-50s. Yet we’re at risk of letting them slip away.
‘If we don’t act now to help them stay in work, we risk stalling growth before we’ve even switched on the engine.’
Brain drain: The departure of long-serving staff means industries such as defence, advanced manufacturing and life sciences are losing their invaluable experience
The figures illustrate why governments of both stripes have been trying to persuade over-50s to come off the golf course and back into work. The number of economically inactive 50-to 64-year-olds soared to 3.7 million just after the pandemic. It has since come down, but remains at more than 3.4 million – with many of those likely to be accounted for by long-term sickness as well as retirement.
The Standard Life study found that key growth sectors had a higher early retirement rate than the rest of the economy.
It calculated the billions of pounds of losses to the economy by multiplying the number of staff by the average ‘gross value added’ by each worker in 2024 as measured by official statistics.
‘If we assume many in this group could be incentivised or supported to work for longer – for example, by creating more flexible or part-time work – then this loss could be reduced, which would make a significant contribution to the growth these sectors generate,’ the report said.
And it offered a contrast to the idea that Britain’s fastest-growing industries are driven by the enthusiasm of eager young recruits, saying: ‘Most of the workers who will determine the success of the Government’s new industrial strategy are already part of the workforce.
‘Over-50s are a crucial part of the workforce in these sectors, meaning retention and upskilling is just as important to the industrial strategy’s success as attracting and training new entrants.’ The report showed that over-50s comprise 31 per cent of staff across key growth sectors overall – rising to 38 per cent, or 350,000, in sectors such as defence.
And the average age of workers has been increasing – from 37.6 in 1991 to 44.7 today.
Workers typically leave 2.6 years earlier than the average for the wider economy.
Some of the sectors are much more likely to see staff take early retirement – with about three in ten employees of financial services or defence firms doing so, and just over a quarter in life sciences and advanced manufacturing.
That compares with a national average of 21 per cent.
Meanwhile a study last year by the Centre For Ageing Better suggested that over-50s with long-term health conditions were being put on the scrapheap thanks to ‘ageist assumptions’.
It also revealed Britain had much higher inactivity rates due to illness among over-50s than Germany, France and Italy.
Former Chancellor Jeremy Hunt tried to encourage more 50-somethings to return to work, saying life ‘doesn’t have to be about going to the golf course’.
He announced a big increase in the number of over-50s benefiting from ‘mid-life MOTs’ to help people review their skills and break down barriers to work.
He also launched ‘returnerships’ – a type of apprenticeship targeted at over-50s to cut down the amount of training needed before they can go back.
More recently, Reeves has said that she wants to tackle the problem, declaring: ‘If you can work, you should work.’
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