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Living longer – Office for National Statistics

3. Changes in labour market measures for older workers since the beginning of the pandemic

Across almost all ages, employment rates have decreased, while unemployment rates and economic inactivity rates have increased over the period of the coronavirus (COVID-19) pandemic. Workers in the youngest age groups (16 to 24 years) have been the worst affected compared with other ages. While the impact of the pandemic has been greatest for younger workers, older workers have been affected to a greater extent than middle-age groups.

Employment

The seasonally adjusted employment rate for those aged 50 to 64 years fell from 72.6 to 71.1%, and for those aged 65 years and over fell from 11.5 to 10.4%, with broadly similar changes in employment rates seen for older men and women.

There was a decline in the number of those employed aged 50 to 64 years over the year December 2020 to February 2021, despite an increase in the population aged 50 years and over in this period. This decline was driven by those aged 50 to 54 years and 65 years and over.

The proportion self-employed among older workers (50 years and over) fell by 2.0% over the period to 19.4%, with a corresponding increase in proportion who were employees to 80.0%1. Employment status is self-reported, some of this change has been driven by an increase in workers who have changed their self-classification from self-employed to employed even though they have not changed jobs.

The fall in the number of self-employed aged 50 years and over was larger than the gain in the number of employees, leading to an overall seasonally adjusted net loss of 193,000 older workers (downfrom 10.7 to 10.5 million).

Hours worked

The pandemic has impacted the weekly average hours worked for all ages.

In December 2020 to February 2021, those employees aged 50 years and over were more likely to report working fewer hours than usual (including none) in the past week because of the coronavirus than those aged under 50 years, with those 65 years and over the most likely to say they had worked reduced hours.

Among older employees working reduced hours, the 65 years and overs were the most likely to receive no pay and the least likely to receive full pay.

Older women employees were more likely to have reduced their hours because of the impact of the coronavirus than men (14.8% of women compared with 12.1% of men).

Given that relatively high proportions of older people are self-employed this is likely to be an underestimation of reduction in working hours amongst older workers because of the coronavirus. There is evidence that those aged 50 years and over who are self-employed were more likely to have seen a reduction in hours than employees between January 2020 and January 2021 (Understanding Society: COVID-19 Study, Wave 7).

Furloughs

The government introduced the Coronavirus Job Retention Scheme (CJRS) (furlough) at the beginning of lockdown in March 2020 to support employers in paying their employees during the coronavirus pandemic. This will now continue until 30 September 2021.

There are 4.7 million furloughed employments (February 2021) with 27.9% (1.3 million) of these being aged 50 years and over. While the youngest employees have the highest take-up rates there is also an small upward trend at the oldest ages.

Some furloughs may end in redundancy when the scheme ends. This may present more challenges for older people who, once they become unemployed, are more likely to be unemployed long-term than younger people; 3 in 10 of those aged 50 years and over on furlough think there is a 50% chance or more that they will lose their job when the furlough scheme ends (Understanding Society: COVID-19 Study Wave 4).

The government also set up an Income Support Scheme (SEISS) for those who are self-employed and whose trade has been adversely affected by the pandemic. This is of particular relevance to older workers, as a greater proportion are self-employed compared with younger workers. For each of the SEISS grants to date the take-up rates for self-employed workers aged 55 to 64 years have been around the same as other age groups but those aged 65 years and over have had the lowest take-up rates of all age groups although they have had the highest average claim values. 

Unemployment

The seasonally adjusted unemployment rate for those aged 50 to 64 years increased from 3.0% in December 2019 to February 2020 to 4.1% in December 2020 to February 2021, with rates consistently higher for older men than women. The number unemployed in this age group increased by 109,000, to 394,000.

Redundancy

Redundancy rates increased sharply across all ages following the onset of the pandemic, peaking at 14.2 per thousand in September to November 2020 before declining to 7.3 per thousand in December 2020 to February 2021. The pattern varied by age, with redundancy rates increasing first for those aged 16 to 24 years and also declining first for this age group.

Those aged 50 years and over had the highest overall increase in redundancy rate over the year to December 2020 to February 2021, rising from 4.3 to 9.7 per thousand, up 5.4 per thousand on the year. This was the highest redundancy rate across age groups in the latest quarter.

Over a quarter of redundancies for men aged 50 years and over during the period of the pandemic were in manufacturing (one of the most common industries for older men to be working in). Around one-fifth of redundancies for men were in distribution, hotels and restaurants and a further fifth in banking and finance. Construction, which is the second most common industry for older men to work in had fewer redundancies at 8% of older male redundancies.

Around one-third of all redundancies for women aged 50 years and over were in distribution, hotels and restaurants, significantly higher than any other industry. Redundancies were also relatively high in banking and finance, accounting for around 1 in 5 redundancies, in manufacturing, and in public administration, education and health, each accounting for around 14% of redundancies for older female workers.

Those aged 50 years and over are more likely to be long term unemployed (for 12 months or more) than younger age groups. In December 2020 to February 2021, 29.9% of unemployed 50 years and overs were long-term unemployed compared with 18.9% of those aged under 50 years (seasonally adjusted). Previous research has shown that the more time spent out of work, the less likely someone is to return to employment and the likelihood of returning to work decreases with age.

Economically inactive

The seasonally adjusted economic inactivity rate of people aged 50 to 64 years increased from 25.2% to 25.9% between December 2019 to February 2020 and December 2020 to February 2021, the number of people increasing by 131,000, from 3.2 to 3.4 million. This increase has been primarily driven by increased inactivity rates at ages 50 to 54 years, the age group also primarily accounting for the drop in employment levels among older people.

Among those older people economically inactive who were not looking for work in December 2019 to February 2020 but said they would like to work, 2.3% said this was because they believed there were not jobs available at that time. A year later this had risen to 5.3%.

Notes

1 The proportion of workers who are employees and self-employed do not add up to 100 because of the inclusion of people on government schemes and unpaid family workers.

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