LONDON (Reuters) – A Woodbridge couple, in their 50s, decided there were more important things in life than work during the coronavirus crisis, so they quit their stressful jobs once and for all. The number of such early retirees is increasing in the UK, and despite the rise in the cost of living due to inflation, they are rejecting government calls to return to work because they are worried about a shrinking workforce.
Against a background of social turmoil caused by the new coronavirus pandemic, workers retired in their 50s and 60s for various reasons, including declining health. It has led to chronic labor shortages and is expected to drag down UK economic growth for years.
Chancellor Hunt says Britain needs them off the ‘golf course’ and back to work. But many early retirees are relatively wealthy, so persuading them is not easy. Hunt is considering including a back-to-work policy in Wednesday’s budget.
But ex-tech marketing executive Liz Woodbridge, 58, and ex-fund manager Ian Woodbridge, 57, are mortgage-free and enjoying their new lives in the English countryside. Both were offered consulting jobs by their former employers, but turned them down.
“I would never go back under any conditions, in any kind of work,” said Liz. He even tried a temporary job as an exam proctor at a local school, but soon gave it up because it took up too much of his time.
Double-digit inflation increases the couple’s cost of living on a daily basis, but it’s not enough to change their minds, says Ian.
A shrinking workforce is a headache for the government as it reduces the growth potential of the economy and fuels wage pressures and inflation. Britain’s growth is limited by the stagnation of trade and investment due to leaving the European Union (EU).
Of the seven main economies, the UK is the only one whose economy is still below pre-pandemic levels. Economists believe this has something to do with the shrinking workforce.
Since the fourth quarter of 2019, there have been 408,000 fewer people aged 16 to 64 in the UK workforce, of which 313,000 are over 50, according to the Office for National Statistics.
Despite the increase in the cost of living, the working age population between the ages of 50 and 64 is up by just 68,000 from the lowest level reached in the middle of last year.
The mass early retirement of workers over the age of 50 is unparalleled in other developed countries. The UK has seen the biggest drop in employment among 55 to 64-year-olds in the developed world, according to data from the Organization for Economic Co-operation and Development (OECD).
The Bank of England said last month that the UK labor force participation rate will remain below pre-pandemic levels for the foreseeable future.
Treasury Secretary Hunt’s options are limited. Prime Minister Sunak said earlier this year that he wanted to make better use of the welfare system to encourage people to return to work. But around 90 per cent of unemployed people aged 55 to 59, including early retirees, are not living on state benefits, according to the Office for National Statistics.
“This is hard to convince, as as many as 90% of early retirees say they will probably or never work again,” said Tony Wilson, director of the UK Employment Institute.
The Woodbridges say the government should use its scarce resources to help young people, rather than trying to get older people into jobs with tax incentives. We, the “golden generation,” enjoyed defined benefit pensions, free college education, and affordable housing that young people today can only dream of.
“They’re taking on student loans and paying for the 40 years of parties we’ve enjoyed,” says Ian.
Wealth is a major factor in deciding to retire early. Analysis by the UK’s Resolution Foundation, based on pre-pandemic data, found that when people aged 50 to 59 were divided into five groups based on their wealth levels, the top end were 10 times more likely to retire in early than the bottom end. it was loud.
British citizens in private pensions can withdraw their assets from the age of 55 onwards without any tax ‘penalty’. This age is lower than other countries.
Stephen Millard, deputy director of the UK’s National Institute for Economic and Social Research, said the system contributes to the significantly lower number of older workers in Britain than in other countries.
For them, financial opportunities during the pandemic, such as rising house prices near London, have also accelerated their decision to retire early, says Ian. The couple sold the house and moved to a cheaper rural property.
But financial comfort isn’t the only driver of early retirement.
Deborah Fayhan, 62, left her job as an NHS ward manager in April 2020 and lives on a modest pension with her husband, who was forced to retire with a knee injury. My former colleagues can help me return to work, but I don’t want to go back to working hard shifts.
A survey by the British Trade Union Congress found that health problems were the most common reason for resignation among low-income workers aged 50 to 64, rather than early retirement.
There are 390,000 more people of working age in the UK out of the economy due to long-term health problems compared to the end of 2019.
In a one-year survey that ended at the end of September last year, young people aged 50 to 64 were evenly divided between early retirement and health reasons as reasons for stopping work since the pandemic.
Some companies value very experienced older workers. Retaining such employees is a priority for Jenny Holloway, CEO of clothing company Fashion Enter. This has become even more important as the number of workers from continental Europe has decreased since Britain left the EU.
The company has slightly improved working conditions to do so, with skilled seamstresses earning £20 ($24) an hour, well above the UK average.
Holloway said it takes years for new hires to reach this level. “The older workers have the skills. We can’t find young people with the skills we need, so it’s very important to keep older workers,” he said.
(Reporter David Milliken)
