Britons who work beyond state pension age now pump more than £60billion into Britain’s economy annually, according to shocking analysis from the Centre for Ageing Better.
This contribution represents four times the projected yearly expense of maintaining the triple lock, which guarantees state pensions rise by the highest of either inflation, average wage growth or 2.5 per cent.
The 65-plus workforce in the UK has swelled to an unprecedented 1.7 million individuals, comprising one in every 25 workers across the country. Their collective output accounts for roughly two per cent of national gross domestic product (GDP).
To put this figure in perspective, the economic value generated by older workers amounts to approximately three times what the government spends on policing each year.
State pensioners add £60bn to UK economy despite triple lock axe calls
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It also surpasses the planned annual increases to day-to-day NHS funding for the remainder of the decade.
Those working past state pension age bring in an estimated £6.8 billion through income tax and employer National Insurance contributions each year.
Employment among the 65-plus demographic has seen the most rapid expansion of any age bracket, both in absolute numbers and participation rates. The employment rate for this cohort has more than doubled since the turn of the millennium, now standing at 13.2 per cent.
Over the past twelve months alone, more than 180,000 people in this age group have entered or returned to work. Earnings have also improved, with workers aged 65 and above now taking home around 51 per cent of the median weekly wage earned by those aged 35 to 49, up from 40 per cent a decade earlier.
Older Britons are working to contribute to the economy
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Dr Andrea Barry, the deputy director for Work, Retirement and Transitions at the Centre for Ageing Better, said: “Our analysis of the post state pension age workforce is further evidence that retirement in this country is changing.”
She added: “The traditional retirement cliff-edge, where people moved directly from full-time work to no work, is no longer the case for the majority.”
Dr Barry called on ministers to conduct a comprehensive review of policy affecting people in their 60s to reflect this shifting landscape. However, she cautioned that record numbers of older workers likely stem from demographic shifts rather than genuine progress in removing workplace barriers.
“Ageism, health conditions and caring responsibilities are all barriers stopping many more people continuing to work even up to state pension age, let alone beyond it,” she said.
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Dr Karen Hancock, the economist and research analyst at the Centre for Ageing Better, said: “People working past state pension age in the right work for them can enjoy many benefits, including a sense of purpose, cognitive stimulation, order and routine as well as feeling part of a team and the social interactions that being in work can offer.”
She noted that research demonstrates multigenerational workforces tend to be more innovative and productive. Dr Hancock highlighted a key challenge: those who wish to continue working generally can, whilst those facing financial pressure often struggle to secure employment.
Approximately two-thirds of workers past state pension age cite enjoyment, health or purpose as their motivation, while just 14 per cent say they cannot afford to retire.
The Centre for Ageing Better recommends employers embrace flexible working arrangements and paid carers’ leave to maximise the contribution of older workers.