UK’s Cost of Living Crisis Driving Older People Back to Work

The combination of a volatile financial market, rising inflation and the cost of living has led to the ‘Great Unretirement’ – a time in which retired people are now returning to the workplace to make costs meet.

According to data from the Office for National Statistics (ONS), there are now more people aged 50 or older in work or looking for work than since before the Covid pandemic.

Their data shows that there was an increase of 116,000 in economic activity, referring to people working or actively looking for work) among over-50s in the past year. Men aged over 65 accounted for over half of this total increase.

Experts say that the increase is driven by former people in retirement making the decision to return to work, as opposed to people working longer. According to the Chief Executive of Rest Less, a digital community for the over-50s, Stuart Lewis, told the Guardian that “people who thought they could retire comfortably during the pandemic are having to unretire and find work again to bring in extra income and top up their pensions while they still can.”

Lewis goes on to state that we are seeing “increasing numbers of retirees are feeling poorer than they’ve felt before, with consumer confidence at a record low and purchasing power eroded on a monthly basis. All this is driving the trend of unretirement.”

Lewis adds that volatile financial markets have contributed towards creating significant fear and uncertainty surrounding people’s perceptions of their future retirement income. This comes as we saw a one-off suspension of the state pension triple lock in April, which meant that the state pension only increased by 3.1%, totally unaligned to the 9.4% jump in inflation last month.

Richard Allan of consumer finance start up, Capital Bean, commented: “With rising living costs, it is not surprising that people are not only working longer, but even going back to work.”

“There are certainly some interesting opportunities to continue working part-time or remotely, which can be more convenient for an aging population.”

“This could add a lot of value to the economy, with this particular group’s knowledge and expertise, whilst avoiding high cost or riskier measures to borrow money, such as second mortgages and equity release, which leave little for their families in terms of inheritance.”

Further, the Charity Director at Age UK, Caroline Abrahams, added that it came as no surprise that growing numbers of retired people were now “scrambling to return to work in an effort to shore up their finances against the storm”.

Abrahams went on to add that “judging from what we’re being told at Age UK, many older people are looking ahead to the winter with extreme trepidation. With inflation high and rising we can see why: the prospect of scrambling to afford to keep the heating on is truly frightening.”

“Carefully laid retirement plans, which looked economically sustainable a year ago, are now shot to pieces and that’s a huge disappointment if you’ve been looking forward to a rest and the chance to enjoy yourself after many years of working.”

The Government has been heavily criticised for removing the promised protections from pensions.

Qualitative data from the ONS study supports the argument that the figures are reflective of growing numbers of people coming out of retirement, as opposed to continuing to look for work after the age of 65. It found that one in three aged between 50-64 who are not currently looking for work would consider going back to work in the future. This figure fell to one in 10 amongst those aged 65 and older.

This trend is further supported by a recent poll conducted by Rest Less’ retired members. 32% stated that they would consider returning to work or that they were already working again, while almost 70% of respondents said that if they were to ‘unretire’, it would be purely or partly for financial reasons only.