In their fifties and deciding there was more to life than work, Liz and Ian Woodbridge quit stressful jobs during the pandemic – part of a cohort of British early retirees now resisting a government call to return, despite rising living costs.
For an array of reasons, including ill health, hundreds of thousands of older workers left their jobs during and after the societal disruptions of COVID-19, contributing to a chronic labour shortage that forecasters predict will drag on Britain’s economic performance for years.
The relative wealth of many of the early retirees poses a challenge for finance minister Jeremy Hunt, who has said Britain needs them to leave “the golf course”. Hunt is considering policies to encourage them back in the UK’s March 15 budget.
But with no mortgage to pay, and enjoying a new lifestyle in the English countryside, both Liz, a 58-year-old former tech marketing executive, and Ian, a 57-year-old ex-fund manager, have spurned consultancy offers from their old employers.
“Nothing would ever entice me to go back to any kind of work,” said Liz, who tried a temporary job invigilating exams at a local school but soon resented the intrusion into her time.
Double-digit inflation has increased their day-to-day costs, but not enough to change their minds, Ian said.
For the government, the shrinking labour force is a headache that reduces economic capacity and fans wage demands and inflation. It comes at a time when Britain’s growth is also held back by Brexit-related trade and investment disruption.
Britain is the only one of the world’s seven largest advanced economies to still be smaller than it was before the pandemic, and economists see a link to the smaller workforce.
Since the final quarter of 2019, Britain has lost 408,000 people aged 16 to 64 from the workforce, according to the Office of National Statistics. Of those, 313,000 were over 50.
Even with the surge in the cost of living, the number of people aged 50-64 in the labour force has risen by just 68,000 since its low point in mid-2022.
The exodus of older workers has no equivalent in other advanced economies. The employment rate for workers aged 55-64 has fallen more than in any other advanced economy, according to figures from the Organisation for Economic Co-operation and Development (OECD).
The Bank of England forecast last month that Britain’s overall labour force participation rate would remain below its pre-pandemic level for the foreseeable future.
Hunt’s options are limited. Although Prime Minister Rishi Sunak said at the start of the year that he wanted to use the welfare system better to get people back to work, around 90% of people aged 55 to 59 who have retired early or are out of work do not depend on state benefits, according to an Office for National Statistics survey.
“It’s quite a hard sell,” said Tony Wilson, director of Britain’s Institute for Employment Studies. “The best part of 90% of people who say they are early retired … say that they will probably or definitely never work again.”
“GOLDEN GENERATION”
For the Woodbridges, the government should focus its limited resources on helping the young rather than pushing comfortable older people into work with tax breaks, saying their “golden generation” has already enjoyed final salary pensions, free university education and cheaper housing that the young can only dream of.
“Kids are saddled with student loans and they’re basically picking up the tab for the 40-year party that we’ve enjoyed,” Ian said.
Business groups and researchers agree that acting on childcare would do more to unlock greater economic growth.
Wealth plays a big factor in decisions to retire early. Based on data from before the pandemic, Britain’s Resolution Foundation found the richest fifth of 50-59 year olds were 10 times likelier to retire early than the bottom fifth.
Britons with private pensions can withdraw assets without tax penalties from the age of 55 – a lower age than elsewhere.
This could have contributed to Britain’s greater fall in older workers, said Stephen Millard, deputy director of the National Institute of Economic and Social Research think tank.
In the Woodbridges’ case, the pandemic threw up economic opportunities that accelerated their decision to retire early, Ian said, including increasing the value of their home near London, which they sold to move to a cheaper property in rural Shropshire.
But the well-off are not the only ones to leave the work force early.
Deborah Feighan, 62, retired from her job as a ward administrator for Britain’s National Health Service in April 2020 and lives on a modest pension along with her husband Malachy, who had to stop work due to knee problems.
Former colleagues have suggested she return to work, but she does not want to go back to her previous rigid shift pattern.
(REUTERS)