Is de-retiring the answer to labour shortages post-Brexit?

Chris Ball looks at the retired Brits who have returned to the world of work, and asks what makes people want to come out of retirement

Attending my local NHS health centre to give a blood sample recently, I was intrigued that the phlebotomist was a woman in her late seventies. “They can’t get people to do this work anymore,” she explained, “and I have always enjoyed my job, so why shouldn’t I?”

Good for her, but it made me think. While the government has responded to the ageing workforce by dissuading people from retiring early and pushing up the state pension age, less thought has been given to the position of ‘reverse retirees’ – people who have de-retired, and come back into the workforce. 

Registered unemployment in the 16-64 age range in the UK is currently 1.4 million people (4.3 per cent of the labour force) – the lowest since 1973. Meanwhile, 8.73 million people below the age of 65 are economically inactive, but this includes nearly two million long-term sick, 2.1 million looking after family members and 2.3 million full-time students. It leaves a core of perhaps a million ‘hard to reach’ people who may be very difficult to support back into work. 

It is hardly an encouraging picture for our labour supply challenge, even if there are sound social justice reasons for supporting the hard to reach jobless. To meet manpower needs post-Brexit, the net may need to be more widely cast.

Turn then to the 1.15 million people below 65 and 10.5 million over 65s who are described as ‘retired’.  While increasing numbers of the over 65s are working, many have simply continued beyond 65 with their existing employer, so the issue of ‘de-retirement’ has not concerned them. The government hopes greater numbers of older people will step up to the plate and work longer, so it makes sense to examine the de-retirement idea. 

Who are they, these retirees who return to the world of work? Researchers at Westminster University and the Policy Studies Institute have shed some light on them. Job satisfaction, rather than simply money, is the key driver behind de-retirement decisions. In Sweden most de-retirement is by individuals willing to return to past jobs that gave satisfaction. Those making comebacks are predominantly better educated, in better health and with better pensions. A study of English and US de-retirees found a similar pattern.

In the US, researchers suggest that “de-retirement is closer to leisure than something forced upon them through financial need”. Money does matter though – people in middle income jobs but with poor pensions are more likely to de-retire than those with good pensions in similar jobs. 

People with younger children and mortgages are more likely to de-retire than those without them. In Britain, most returners see themselves as primarily retired but ‘working in retirement’ with flexibility being valued, while the Americans tend to view their re-entry to work as a fuller commitment.

De-retirement is more common in the US than in the UK: 10 per cent of US retirees aged between 50 and 70 have de-retired, compared with 6 per cent in the UK and 2 per cent in Italy. In all three countries, men are the most common de-retirees.

The most likely returnees are in the middle income group, in good health and active in the community, and have volunteering roles and an employed partner. (Interestingly, having a caring role only slightly reduces the likelihood that one would de-retire, though this connection may have been stronger if the intensity of caring responsibilities had been measured.)

As we approach four years since the government’s Fuller Working Lives strategy to support the extension of working life was published, with a plea to employers to ‘recruit, retrain and retain’ older workers, it seems important to take stock. At the time the strategy seemed worthy, but hardly a game changer – and so it has proved. 

Research has shown that while some employers have embarked on initiatives to promote employee health and rethink their careers, most have done very little to further the agenda. Moreover, opportunities for employees to consider staged retirement or similar innovations are few and far between, particularly for the lower-paid worker. De-retirement seems to fall into this category – the unrecognised remedy, at the present time anyway. 

With rising concerns about skills and labour gaps following Brexit, bringing people out of retirement into part-time or flexible work might seem a viable answer. Understanding what might encourage de-retirement merits attention. It is a familiar story in a way: those who like their work, however old they are, are far less likely to want to give it up and more likely to come back to it.

Chris Ball is a researcher at Newcastle University’s Centre for Research into the Older Workforce

Chris Ball and Professor Matt Flynn will be holding a free workshop on engaging employees to support active ageing at Newcastle University's London campus at 8.30am on 13 February