Yahoo Finance Work from home keeps older workers in job for longer
As remote working gains acceptance across many industries thanks to the pandemic, a new report shows this may be helping those aged 50 and above to stay in the labour market for longer.
The Office for National Statistics (ONS) said that in June and July 2020, older employees working entirely from home were more likely to say they were planning to retire later (11%) compared with those who were not (5%).
It has been estimated that if the employment rate of people aged 50 to 64 years matched that of those aged 35 to 49 years, it would add more than 5% to UK gross domestic product, or £88bn ($120bn).
In April to May 2021, older workers aged 50 to 69 years who were working from home reported that it improved their work-life balance and wellbeing.
For those who can afford it, early exit from the labour market may be voluntary, but others leave because of ill-health or caring responsibilities.
This not only has implications for the future financial security of individuals but also has implications for the wider economy, the ONS said.
Pre-pandemic, around 66.8% of workers aged 50 years and over said that they "never" worked from home. However, 41.5% of this group later "switched" to working from home between April 2020 to March this year.
Exit from the UK labour market for older workers aged 50 years and over and prior to state pension age (66) increases with age.
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In 2019, 13.8% of people aged 50 years were economically inactive and at age 64 years over half (51.9%) were economically inactive.
At age 50, 7% of women were economically inactive due to looking after home or family. This compares to 1.7% of men.
The report also found similarities between older workers who are most likely to exit the labour market early and those who did not switch to working from home during the pandemic.
It said both groups tend to have poorer health, lower wellbeing, live in deprived areas and have lower or no qualifications.
"The shift to working from home has had a positive effect on older workers in terms of their health and work-life balance," said Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown.
"Not having to commute to an office every day frees up time and can also mean you are less exposed to illness. It can mean people are able to work longer than they otherwise would have."
However, she said it remains to be seen if working from home remains the norm as the country emerges from the pandemic.
Meanwhile Maike Currie, investment director at Fidelity International, said that “according to ONS data, for some, the “switch” to home working will have improved overall job satisfaction, work/life balance and even contributed to better health. However, that’s not the case for all."
He said his firm’s research showed that a fifth (21%) of people in their 50s think the pandemic has had a negative impact on their career.
“There is a financial domino effect – with a fifth of over-55s experiencing a decrease in their personal income over a 12-month period due to the pandemic, with a real concern that changes to working patterns or income levels could mean retirement looks very different to the one people had imagined pre-pandemic.”
“As the dust continues to settle and the ‘new normal’ of work becomes a little clearer, now is the time to assess how retirement plans might need to flex and ensure you have enough set aside for the future you want. For some, this might mean working for slightly longer or adapting future plans,” he added.
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