Yahoo Finance Britain’s ‘great unretirement’: cost of living drives older people back to work
Spiralling inflation, volatile financial markets and the soaring cost of living are leading to the “great unretirement”, with research suggesting retired people are returning to the workplace.
There are now more people aged 50 and older in work or looking for work than since just before the pandemic, according to data from the Office for National Statistics (ONS).
Its analysis shows there was an increase in economic activity (people working or looking for work) of 116,000 among the over-50s in the past year.
More than half the total increase is among men aged over 65 – whose economic activity levels increased by 66,000, or 8.5%, in a year – with 37,000, or 6.8%, more women over 65 in or looking for work.
Experts say in-depth research indicates the increase is driven by former people in retirement returning to work, rather than people working longer. “People who thought they could retire comfortably during the pandemic are having to unretire and find work again to bring in extra income and top up their pensions while they still can,” said Stuart Lewis, the chief executive of Rest Less, a digital community for the over-50s.
“Increasing numbers of retirees are feeling poorer than they’ve felt before, with consumer confidence at a record low and purchasing power eroded on a monthly basis,” he added. “All this is driving the trend of unretirement.”
Volatile financial markets were creating significant fear and uncertainty in people’s perceptions of their future retirement income, said Lewis. The one-off suspension of the state pension triple lock last April means that the state pension only increased by 3.1%, while inflation increased at 9.4% in June. “It’s no surprise that people are looking at ways to make additional earnings,” he added.
Caroline Abrahams, the charity director at Age UK, said it was no wonder that significant numbers of retired people were “scrambling to return to work in an effort to shore up their finances against the storm”.
“Judging from what we’re being told at Age UK, many older people are looking ahead to the winter with extreme trepidation,” she said. “With inflation high and rising we can see why: the prospect of scrambling to afford to keep the heating on is truly frightening.
“Carefully laid retirement plans, which looked economically sustainable a year ago, are now shot to pieces and that’s a huge disappointment if you’ve been looking forward to a rest and the chance to enjoy yourself after many years of working.”
Ros Altmann, the former pensions minister and Conservative peer, said the government was wrong to remove the promised protections from pensions. “The fear of inflation has caused huge anxiety and driven some to return to work even if their health may not be up to it,” she said.
Cora Adcock, a part-time music teacher who retired at 64, had to return to work aged 69 because her pension did not cover her increased living expenses.
“I just couldn’t manage financially on my state and teacher’s pensions, especially as I missed a few years of contributions because I took time off to care for my children when I was younger,” she said.
Adcock found work playing the organ for up to 13 funerals a day at a local crematorium but lost her job aged 71. Partially sighted, Adcock is still trying to find work. “I’m looking for work that I can’t really physically do because the bills are such a worry,” she said. “I’ve already cut everything I can. I don’t even use the oven.”
Dr James Derounian, from Gloucestershire, recently returned to his work as a lecturer two years after retiring aged 62. “I had planned to retire but life had other ideas,” he said. “The cost of living curtailed all my plans.”
Qualitative data from the ONS supports the notion that the figures reflects those coming out of retirement, rather than simply continuing to look for work after the age of 65: it asked 12,000 people aged 50 to 70 years old who were not currently looking for work, if they would consider going back to work in the future. One in three of those aged 50-64, and one in 10 of those aged 65 and older, said they would.
The trend is also supported by a recent poll of Rest Less’s retired members, 32% of whom said they would consider returning to work or that they were already working again. Almost 70% of those said they were “unretiring” purely or partly for financial reasons.
