New analysis by PwC shows Northern Ireland has one of the lowest employment rates (60.5%) for older workers in the UK.
PwC’s Golden Age Index measures how well countries are harnessing the power of their older workers. It shows there is significant regional variation in the employment rate of over 55s in the UK from around 57% in the North East of England, to 68% in the South East.
In measuring how well countries are harnessing the power of their older workers, the Index shows that if all 12 UK regions absorbed older workers into the labour force to a similar extent as the South East, it would translate to an additional 320,000 in jobs – equivalent to around one third of UK vacancies. If Northern Ireland recorded the same employment rate for the 55-64 age group as the South East, an additional 18,000 would be employed.
The Index, based on most recently available data from 2021, also finds that people in the UK aged over 55 are more likely to have left work and not returned than those in other G7 countries.
The UK’s ranking of 21 out of 38 OECD countries remains unchanged to its position in 2017, as it struggles to close the gap on how well it includes older workers in its labour force relative to other economies. The UK is an outlier among the G7 as economic activity level among older workers has not recovered to pre-pandemic levels, with over 55s driving three-quarters of total economic inactivity. New Zealand, Iceland and Japan top the rankings for the highest proportion of economically active over 55s in the labourforce.
High house values, investment income and poor health are the primary reasons for the UK’s deteriorating employment rate for older workers.
The link between house prices, investment income and employment rates of older workers can be explained by the wealth effect – as people feel more financially stable, they are more likely to choose leisure over work. For example, as house prices appreciate, homeowners are likely to feel more financially secure because of the equity build up and thus less likely to continue to work.
The PwC analysis found that health conditions and access to healthcare also emerged as key drivers of employment amongst 55-64 year olds. More than one in three people over 50 who quit their job during the pandemic due to poor health were on an NHS waiting list.
Jason Calvert, economist and place & purpose leader at PwC Northern Ireland, says:
“Encouraging older workers to return back to work would aid businesses with labour shortages, ultimately helping to alleviate domestic inflationary pressures. It’s vital that businesses and policymakers focus on designing policies to support those who want to continue to work, as well as help to incentivise older workers to return to work if they want to. For this to work, policies for older workers will need to be tailored to reflect the unique sector mix in Northern Ireland. For example, workers in Northern Ireland are more likely to work in the manufacturing and agriculture sectors, which are generally more physically demanding and require more on-site presence.”
The report also identified workforce health as a key factor which influences the employment rate of older workers. The ONS has found that a third of over-50s who quit their job during the pandemic are on NHS waiting lists.
The report highlights that reversing the trend in long-term sickness amongst the population could be one of the key policy levers to bring workers, and particularly older workers, back into jobs. PwC’s survey of 1000 people (conducted as part of the Golden Age Index) showed that the age cohort that is suffering the most from long-term sickness is the 35-44 age group followed by the 55-64 and 65+ age groups – meaning health-related concerns and issues are holding back both the current and future generation of golden age workers.