South East shows highest employment rate among 55-64 year-olds, according to survey

The South East has the highest employment rate of workers aged 55 - 64 in the UK, according to a new survey from PwC, but issues surrounding workforce shortages in the country remain.

PwC's 'Golden Age Index' looks at the labour market impact of workers aged over 55 in the organization for economic cooperation and development (OECD) countries.

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The high rate of older workers in the South East was mainly attributed to the availability of less physically demanding jobs. The region boasts the highest employment rate of workers aged 55-64 in the UK, while the North East showed the lowest.

In 2022, the employment rate among 55-64 year olds varied from around 57% in the North East to 68% in the South East.

More than half of older workers in the South East possess higher education degrees, from around 43% recorded in the North East.

Older workers in the South East are also more likely to be employed in sectors such as financial services, real estate, and professional services, the survey found, while education, health, and manufacturing employ larger shares of older workers in the North East.

Julian Gray, PwC’s south east regional market leader and Southampton senior partner, said: "These findings underscore the pressing need for the UK to adeptly harness the untapped potential of its mature workforce; I’m pleased to see that within the South East older workers are more likely to stay in work, but there’s always more we can do."

He added: "Promoting greater participation of older workers in the labour force can help us mitigate inflationary pressures and foster a multitude of job opportunities. Policymakers and business leaders must work together to implement measures to bridge regional disparities and extend support to older workers through tailored training and development initiatives, thereby bolstering the region's competitive advantage."

The UK's ranking on the overall Golden Age Index stood at 21st place, signifying a comparatively lower performance in relation to the OECD average.

New Zealand emerged as the leader, closely followed by Iceland, both demonstrating the highest employment rates for older workers amongst OECD nations.

A significant proportion of the UK’s older workers remained inactive after the pandemic. Inactivity levels among 55-64-year-olds in the UK have persistently remained above pre-pandemic levels since 2020.

Barret Kupelian, chief economist at PwC, said: "Post-pandemic, the UK economy has struggled to grow the supply side of its economy. In terms of the labour market, there are one million vacancies and the unemployment rate is relatively low.

"Some of the shortage in the labour force can be explained by the economic inactivity rate, which is higher than during the pandemic, and driven predominantly by almost 244,000 older workers, equivalent to the size of Portsmouth, who withdrew from the labour force during the pandemic and have not returned.

"While this has undoubtedly been a choice for many - driven by relative prosperity of this age group taking early retirement - it is also clear that ill health is part of the story which explains this trend."

Kupelian continued: "Understanding the cause of these labour force trends is crucial for the UK, as convincing older workers to return to work could help businesses deal with labour shortages fast with experienced staff, ultimately helping to alleviate domestic inflationary pressures.

"It’s vital, therefore, that businesses and policymakers focus on designing policies to support those who want to continue to work, as well as help to incentivise older workers to return to work if they want to."

People can access a copy of PwC UK’s latest Golden Age Index HERE.

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