Silver exodus begins as thousands of over-50s leave workforce after having enough

Ministers have been warned the surge in baby boomers claiming their state pensions will pile pressure on already stretched public finances. The huge number of people leaving employment earlier than expected appears to be a result of the Covid pandemic. The nearly quarter of a million workers have left employment entirely, and are not seeking new jobs.

The Times reported that senior figures in Government are increasingly alarmed by the exodus from the workplace, which goes against the previous long-term trend of increasing employment among older workers.

Employment experts reckon there are around 600,000 fewer over-50s in work or seeking work than would have been the case on pre-crisis trends.

More than 232,000 in that age group have become economically inactive since January 2020.

The majority of those leaving work are women.

There has also been a significant increase in the number of people classing themselves as long-term sick.

Labour market shortages and inflation were already issues for the economy after Covid, and these issues will only worsen as so many leave the workplace.

There is also a concern that some people may be drawing down their pension pots early and living off the income.

The mass exodus comes as a report from the Resolution Foundation warned the UK’s ageing population and more expensive healthcare will increase public spending by £76billion a year by the end of the decade.

The retirement of the baby boomer generation will increase the cost of funding the state pension by up to £24billion a year, according to their report.

The changing demographic, combined with the cost of new treatments, are also set to increase healthcare spending by around £52billion a year by the end of this decade.

If the trend towards working for longer is further reversed, these problems may be exacerbated.

Tony Wilson, director of the Institute of Employment Studies, told the Times the data is only getting worse.

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He said: “The Treasury are really worried as this was not the Covid crisis that they prepared for.

“A lot of effort was rightly put into helping young people with programmes such as Kickstart because there was a concern that there would not be jobs for people to go to. But what they didn’t anticipate was this crisis in participation that we are now facing.

“This is by far the most significant labour challenge we have faced in recent years — far bigger than Brexit.”

He added that older workers were more likely to be shielding, and may be reluctant to go back into jobs that would expose them to the virus.

It may also disincentivise employers to take on older workers as the country recovers from the virus.

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One person caught up in the exodus, Olivia, 54, told the Times that she left her position as a senior executive at a digital marketing agency in March last year.

A mother of two from North London, Olivia left the workplace for good during the second national lockdown.

She said: “My company was downsizing and I took voluntary redundancy. It was a decision completely driven from my experience in the pandemic. I’d never have stopped working at this age before.

“Both my children were still in school and needed our support a lot with remote learning. I also began caring for my mother during the pandemic in a way I hadn’t before. So my priorities shifted from the professional to personal.”