£31bn growth threat: over 50s workforce exit risks putting the brakes on growth

With growth at the heart of the government’s agenda and the UK’s Industrial Strategy expected imminently, new analysis reveals that early workforce exits among over-50s as a key risk which are costing the economy an estimated £31 billion each year. 

With almost one in three workers in key high-growth sectors aged 50 or over, the Standard Life Centre for the Future of Retirement warns that without urgent action to retain, support and upskill this pool of workers, the government’s ambitions for economic growth, innovation, and regional development could be severely undermined.

The Think Tank’s report, Counting on Experience, warns that demographic changes, if left unaddressed, could severely constrain the growth potential of industries that the Government is relying on to drive economic security, productivity and regional development across the UK.

Patrick Thomson, Head of Research Analysis and Policy at the Standard Life Centre for the Future of Retirement, said: “Most of the workers who will determine the success of the UK’s Industrial Strategy are already part of the workforce. Our economic future, driven by these high-growth sectors, rely heavily on the experience of over 50s – yet we’re at risk of letting them slip away. 

“If we don’t act now to help them stay in work, we risk stalling growth before we’ve even switched on the engine. Supporting longer working lives isn’t just smart economics – it’s essential for a fairer, more resilient society in which people can work for as long as they want or need to in order to save for a decent quality of life in retirement.”

“The incoming Industrial Strategy needs to work for everyone – and it is not just about new entrants, it’s about the millions of people already doing these jobs who have long been the backbone of our industries.”

Eight key growth-driving sectors identified by the government** employ 11.1 million people in total, of whom 3.4 million (nearly one in three) are aged 50 or over, and 450,000 are aged over 65. The share of over 50s rises as high as 38% in defence and 36% in advanced manufacturing. 

The average age for the UK workforce as a whole is 43.8.

The average age of workers in these sectors has increased by seven years since the early ‘90s.Workers in these sectors are now aged 44.6 on average compared to 37.6 in 1991. Seven of the eight sectors are older on average than the economy as a whole, a sign of both the deep expertise within these industries and the urgent need to plan for the realities of our changing workforce.

Every Industrial Strategy sector exceeds the national average for rates of early retirement (retirement before State Pension age), while several also see significant losses to ill health or other non-retirement reasons. 

In total, 440,000 workers aged over 50 leave these sectors each year due to early exits – a trend which contributes to an estimated £31 billion in annual lost economic output. The number of over 50s exiting prematurely in several of these sectors match the total number of under 25s working in them. Without intervention, these trends could leave critical sectors without the workforce they need to meet demand, deliver on innovation and remain globally competitive.

Policy recommendations 

The report calls for the incoming Industrial Strategy, along with individual sector and workforce plans, to explicitly factor in the needs of over-50s. Key recommendations include:

• Introduce more flexible working options and improve job design to support longer, more fulfilling working lives
• Expand access to occupational health and in-work support for those managing health conditions
• Improve availability of midlife training, career guidance and financial advice to help workers plan and adapt