The cost of living crisis may have sent record numbers of retirees back to work | Business newsletter

Since the end of the pandemic and the reopening of economies around the world, the labor market has become tighter, in terms.

In short, in developed economies like Europe and the United States, the number of workers available is less.

Much of this has been set against so-called major resignations when workers decided, after the pandemic, not to return to work.

It could be for a number of reasons, including the so-called Long COVID or the need to care for a loved one with long-term symptoms of the virus, the biggest cause of which is believed to be due to some people reassessing their lives. They decide that they can afford to retire and are happy to do so.

In particular, that second factor was used to explain why, between the last three months of 2019 and the last three months of 2021, around 493,000 Britons aged 50 and over left the workforce.

Interestingly, however, data released on Monday suggests that some of those workers may now be returning to the job market.

The Office for National Statistics (ONS) reported that, in the three months to the end of June, the number of people aged 65 and over in employment rose to a record 173,000. It said a record 1.468 million people aged 65 and over were employed.

It found this was due to an increase in part-time work and particularly in “industries where informal employment is more prevalent, such as hospitality and arts, leisure and recreation.” “.

Of the 173,000 older workers who entered the workforce during the quarter, the ONS said, 85,000 were part-time employees and more than 76,000 were part-time self-employed.

Its figures show that, statistically speaking, someone 65 or older who is still working is more likely to work part-time than full-time.

Accordingly, since most such workers return to the workforce as part-timers, the average number of hours a person age 65 and older is actually decreasing. Typically, such workers work 16 to 30 hours a week.

What the ONS did not consider in this survey is why such workers are returning to the workforce in such numbers.

It’s tempting to speculate that many older workers have decided that working part-time, when they can enjoy a little flexibility, is good for the soul. Many of them will be hearing more and more, towards the end of their careers, about the importance of work-life balance.

Another possible factor is that employers are doing more to lure older workers back by offering them flexible work.

They are also offering higher wages than before: The ONS reported recently that, in June, one in eight businesses raised wages – and that number has increased to almost a quarter in those industries, for example. such as hotels and healthcare, where part-time work is established.

However, the chances are that in most cases this return to the job market is driven by cost of living crisis.

A lot of people living on fixed income, whether occupational or state pension, will find that those earnings don’t go far at a time when inflation rates are higher than 10%.

Others, often defined contributors – “money bought” in lingo – pensions, will note how their retirement savings have been eroded by this year’s reversal. on the stock market and came to the conclusion that they also need to supplement their retirement savings.

Either way, it’s a development that will be welcomed by governments, not to mention employers.

Dame Sharon White, president of the John Lewis Partnership, recently called on ministers to do more to encourage older workers to return to the workforce to ease stress in the job market. .

Dame Sharon, an economist earlier in her career as a former senior HM Treasury official, argues that the aging labor shortage is causing inflation because it is creating a technical shortage. power.

So this development will also be welcomed by the Monetary Policy Committee at the Bank of England, which is expected to vote on a rate hike next week.