Despite overall poverty rates declining at the time, those leaving the workforce during 2020-2021 were disproportionately affected in comparison to those who left in pre-pandemic years.
The report reveals that in the last year 50 to 70 year olds who left work in 2020-2021 have cut their food expenditure by roughly £60 per week on average. This was higher than those who left in previous years who did not have to alter their spending.
The group reported lower levels of well-being than those who left work before 2020. Those who left work in 2020-2021 were also more negatively affected even when considering the pandemic.
Additionally, they were less likely to receive pension incomes as almost a half (49 per cent) did not have access to private or state pensions. This number was at 43 per cent for those who left work in 2019-2020.
Older workers who exited the employment at the beginning of the pandemic retired in less comfort than they would have achieved by retiring earlier. The unstable pandemic economy and the additional health risks for older generations meant that some retired without the pension provisions needed.
However, those who left work in in 2021-2022 saw similar standards and well-being figures to those who retired pre-pandemic. This suggests they were able to leave voluntarily.
Xiaowei Xu, senior research economist at IFS and research author, said: “It is often assumed that older people who left the workforce during the pandemic were wealthy individuals retiring in comfort. Our analysis shows that those who left in the first year of the pandemic experienced a sharp rise in poverty, despite overall poverty rates falling that year, and also suffered large falls in wellbeing.
“Some of this group might well be amenable to coming back into the workforce with the right opportunities, and there are signs that some are returning already. If the government wants to get this group back to work, the success of policies to support older workers, such as the ‘mid-life MOT’, will be critical.”
Peter Matejic, chief analyst at JRF, said: “A high-participation, high-inclusion labour market is vital to reducing poverty. It would help households to boost their incomes, and make sure people are not excluded from the financial, social and health benefits of good work. This research shows many older workers were swept out of work by the coronavirus pandemic rather than this being a positive choice.
“Supporting people back into employment should be a priority for the government alongside ensuring that those who aren’t working can afford the essentials. The government needs to make sure universal credit payments when you are out of work never fall below the amount food, utilities, and other essentials cost.”
