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Labour market data highlights urgent need for action on older workers, say leading think tanks

by April 17, 2025
April 17, 2025
Labour market data highlights urgent need for action on older workers, say leading think tanks

The government must show greater ambition and urgency in addressing the employment prospects of older workers if it hopes to meet its goal of an 80% employment rate, according to the 50+ Employment Taskforce.

Responding to the latest figures from the Office for National Statistics, which reveal a significant employment gap between younger and older workers, the Taskforce is calling on the government to adopt specific targets: raising the employment rate of 50–59-year-olds to 80%, and that of 60–66-year-olds to 55% over the next decade.

Current labour market data shows employment among 50–64-year-olds at 71.6%, trailing significantly behind the 85.7% rate for 35–49-year-olds. The employment gap between these age groups has widened post-pandemic to 14.1 percentage points, compared to 13.1 pre-2020. There are now nearly one million more older workers classed as economically inactive than before Covid-19.

The Taskforce – a coalition of leading organisations including the Centre for Ageing Better, the Learning and Work Institute, the Health Foundation and Age UK – warns that with the state pension age rising to 67 next year, around 900,000 people aged 50–66 who are unemployed or inactive but still keen to work risk being left behind. Reintegrating just half of this group could be enough to help the government meet its 80% employment target.

Dr Emily Andrews, Deputy Director for Work at the Centre for Ageing Better, said:

“We urgently need greater ambition from government to keep older people in the workforce. Many in their 60s are already facing severe financial pressure. Poverty among 60–64-year-olds is the highest of any adult group over 25, and the last time the pension age rose, poverty rates doubled for those on the brink of eligibility.”

The UK lags behind comparable nations when it comes to older worker employment. While employment rates for those aged 25–54 match other high-performing economies like Switzerland, the Netherlands and Iceland, the UK is 16 percentage points behind Iceland for 55–64-year-olds.

Christopher Rocks, lead economist at the Health Foundation, stressed that good work is essential not just for economic productivity, but also for health in later life.

“If the government wants to sustainably raise the State Pension age, it must support flexible, secure, and well-designed jobs that accommodate health needs and caregiving responsibilities,” he said.

Alice Martin of the Work Foundation at Lancaster University added that without structural changes, older workers risk being excluded from the labour market just when the economy needs them most.

“Rising pension ages and sector-wide labour shortages make it essential to support older workers. Millions risk being pushed out of the workforce unless we provide jobs that accommodate care, health and later-life realities.”

Patrick Thompson of Phoenix Insights pointed out the retirement savings gap: “Most people with defined contribution pensions are likely to retire with less than they need. Enabling older workers to stay employed longer is critical—not only for their future financial security, but also for their wellbeing today.”

Stephen Evans, Chief Executive of the Learning and Work Institute, said joined-up work, health and skills services were needed, along with changes to recruitment practices.

“Employers must look seriously at job design and support systems that allow older people to continue working. We must unlock the full potential of this experienced and skilled workforce.”

Caroline Abrahams, Charity Director at Age UK, reinforced that older workers face unique barriers—from health conditions and caring duties to pervasive ageism.

“We need urgent policy action to ensure that older people can either remain with current employers or find new, meaningful work. With the right support, we can unlock a huge, underused talent pool.”

The Taskforce has called for coordinated efforts from central and regional governments, employers and civil society to deliver policies that help older workers access good jobs, remain productive, and support the UK’s economic growth ambitions.

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Labour market data highlights urgent need for action on older workers, say leading think tanks

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