Many older people who left work in 2020-21 ended up in relative poverty – report
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Almost half of people aged between 50 and 70 who left the workforce during the first year of the pandemic ended up in relative poverty, according to the Institute for Fiscal Studies (IFS).
New IFS research, funded by the Joseph Rowntree Foundation, revealed 48% of people in this age bracket who stopped work in 2020–21 were in relative poverty, even though overall poverty rates declined that year.
The report warns that older people who stop working often never re-enter the workforce, meaning this group may be experiencing long-term poverty and greater hardship amid the cost-of-living crisis.
Relative poverty refers to people living in households with income below 60% of the median in any respective year.
According to the research, many older people who left work in the first year of the pandemic have had to cut their food expenditure by around £60 per week.
They also struggled more with their overall well-being and were less likely to receive a pension than those who had stopped working in previous years.
The research, which has been released ahead of the forthcoming IFS annual report on living standards, poverty and inequality, suggests labour market disruptions and the early impacts of the pandemic may have “forced” many workers into early retirement.
Xiaowei Xu, a senior research economist at IFS and an author of the research, said: “It is often assumed that older people who left the workforce during the pandemic were wealthy individuals retiring in comfort.
“Our analysis shows that those who left in the first year of the pandemic experienced a sharp rise in poverty, despite overall poverty rates falling that year, and also suffered large falls in well-being.
“Some of this group might well be amenable to coming back into the workforce with the right opportunities, and there are signs that some are returning already.
“If the Government wants to get this group back to work, the success of policies to support older workers, such as the mid-life MOT, will be critical.”
