Older workers ‘pushed out’ of the workforce after redundancy, study finds

Experts also raise concerns over ‘worrying’ findings that over-50s are more likely to face being made redundant than younger workers

Redundancy has pushed more than one in 10 older workers out of the workforce, a study has revealed, with 11 per cent of over-50s who have been made redundant in the last five years subsequently disappearing from the jobs market.

The Working Late report by Legal & General Retail Retirement and the Centre for Economics and Business Research has found that among the 177,000 over-50s made redundant annually since 2018, 20,000 are estimated to have left the workforce.

The research also found that higher-than-average redundancy rates were far more common among older workers, with over-50s 17 per cent more likely to face redundancy than younger workers.

Emily Andrews, deputy director of evidence at the Centre for Ageing Better, said the figures were “worrying” as they highlighted the risks facing over-50s in the workplace.

“With new funding announced last week to support over-50s back into work, [the Department for Work and Pensions] needs to pay close attention to how well its investments are actually changing outcomes for older jobseekers, to make sure past failures aren’t repeated,” said Andrews.

The report found that from 2007 to the second quarter of 2021, the average rate of redundancy among the over-50s was nearly a fifth higher than for the under-50s.

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It also found that among over-50s experiencing redundancy in the past five years, more than three in five (62 per cent) felt that their age was a contributing factor in this decision.

Andrew Kail, chief executive of Legal & General Retail Retirement said the disappearance of older workers presented a serious challenge to employers.

“Not only are they the fastest growing employee population, but they also have a wealth of experience that UK employers will miss out on if this trend continues,” he said, adding that it was vital that older workers “feel protected in the workplace and not at greater risk of redundancy”.

The research also suggested that redundancy was one of several factors that ended up “derailing” retirement plans. More than a third (39 per cent) of older workers who were made redundant in the past five years have had to change their retirement plans.

A similar percentage said they changed their retirement plans after a reduction in their working hours (34 per cent) or a reduction in salary (33 per cent). Meanwhile, 15 per cent of those being placed on furlough since the start of the Covid-19 pandemic decided to change their retirement date as a result.

The resultant impact of redundancy on retirement savings was significant, the research found, with older workers who have been made redundant expected to save £29,000 less for retirement than the average employee aged 50 and over.