Providing work for over 55s could add £180 billion to UK's GDP
Elderly people in the UK looking for work are likely to find it harder than those in Iceland, New Zealand, Israel or Estonia, according to a new report. Where the UK to better harness this labour, however, the long-term benefits could be in excess of £180 billion for the UK's GDP.
According to an analysis of PwC’s Golden Age Index, the Organisation for Economic Co-operation and Development (OECD) – an intergovernmental economic organisation with 36 member countries – could stand to benefit from a GDP increase of $3.5 trillion if they were to more thoroughly employ over-55s. The Big Four firm’s analysis concluded that if the OECD could match the employment rate for the age group in New Zealand – the world’s second highest for 55-64 year olds – of 78%, the global economy could experience a major boost.
Iceland is the country with the highest employment rate of the demographic – at 84% – although it would be inaccurate to suggest that it is simply because of the nation’s small population, as Luxembourg (40%) was one of the lowest rates. The global average stands at 60%, and while the UK sees its own rate stand above that, it still lags behind 20 other economies around the world.
64% of adults capable of working in the UK are currently in employment, having risen by 1.1% since 2016, as Britain continues to enjoy its lowest unemployment figure in decades. Despite the statistic having improved consistently since 2003, the UK’s status as an employer of older workers has declined at the same rate – partially due to more rapidly increasing employment among the age group in other nations.
Now as the UK faces an ageing population, alongside a decrease in access to continental labour following Brexit, the pressure is on UK employers to step up their efforts to court the 55-64 demographic. Doing so successfully could see the UK’s GDP boosted by 9%, or a long-run gain of £182 billion at today’s values, according to PwC. This would work out at around £16,300 per employee, but it depends on the UK managing to emulate New Zealand’s rate.
As with the employment statistics of the general population, the UK has notable disparities in terms of 50-64 year olds in work. While the South East sees the highest rate of over 75%, while the North East (66.4%) and Northern Ireland (63.2%) have the lowest rates. These areas, along with Scotland, Wales and the North of England typically feature large pockets of previously industrial labour, which has largely been abandoned by successive governments and employers, following the collapse of multiple industries.
Most notably, these include former mining communities which saw pit closures in the 1980s and little to no attempt to retrain former miners or to introduce them to new careers, but similar trends are also occurring in the UK’s current manufacturing sector. Without significant work to reposition these workers in the future economy, their labour will continue to go to waste. In line with this, PwC warned that up to 23% of jobs currently held by the over-55s in the UK are likely to be replaced by automation over the next 10 years.
PwC Chief Economist John Hawksworth said, “The UK needs to pick up the pace in increasing employment for older workers to keep up with the likes of Germany, which has climbed the rankings from 21st to 14th place in our Golden Age Index over the past 10 years, while the UK has slipped a place from 20th to 21st. There are clear economic gains to be made from getting more over-55s into the workforce and, with automation advancing, it is more important than ever that we ensure older workers are able to participate fully in the UK jobs market.”
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