People over 65 are returning to work in droves as the prospect of higher pay offers a chance to mitigate the effects of inflation.
According to official data released yesterday, a record 173,000 more people found employment in the three months leading up to June, despite a 14,000 decrease in the rest of the workforce.
That was in spite of the fact that wage growth, at 4.7%, lagged behind the rise in the cost of living.
Pay decreased by 4.1% in real terms after accounting for inflation, the largest decrease in records dating back to 2001.
The nominal increase, however, is still preferable to nothing at a time when 65-year-olds are still one year away from being eligible to receive state pensions due to recent changes. Only 3.1% more was added to those pensions in the spring.
However, inflation reached a four-decade high of 9.4% in June, and figures released today are anticipated to show that its hold is becoming tighter as it approaches 10%.
Inflation is predicted by the Bank of England to reach 13% in October.
The value of consumer paychecks is being reduced by rising energy costs, which are expected to exceed £4,000 annually next year, as well as soaring supermarket prices, which are adding more than £500 annually to household spending.
The Office for National Statistics’ data on the labour market showed that, despite concerns about an impending recession, unemployment remained stable at 3.8%, not far from five-decade lows.
The jobs market is still strong, according to Prime Minister Boris Johnson. However, the increase in employment of about 160,000 fewer people than anticipated by economists.
Job openings, which were still very near a record high, decreased to 1.274 million in July. “What’s very important is we get our economy going,” said Liz Truss, the front-runner for the Tory presidential nomination. The UK is being flooded with investment as a result of our efforts.
According to Shazia Ejaz, head of campaigns at the Recruitment and Employment Confederation, the numbers bucked the pandemic-era pattern of older workers abandoning the labour.
Some individuals may be forced to reconsider their choice due to the cost of living problem, she said.
“Many industries are experiencing a labour shortage, which is causing firms to reconsider their employment practises.” Many companies are concentrating their efforts on attracting older employees by providing greater freedom.
The causes of the “post-pandemic rise to 65+ employment,” according to Jonathan Boys, labour market economist at the CIPD, the professional association for HR experts, are unclear.
The cost-of-living problem may be forcing people back to work, he said. Employers may be making more of an effort to entice these individuals, according to another hypothesis. Businesses are providing more in order to attract skilled personnel due to the labour shortage.
The state pension age was raised from 65 to 66 in recent years, according to former pensions minister Baroness Altmann, and this was a major contributing element.
She said: “Hopefully companies are making it easier for older people to continue in work and even encouraging them to do so now that the epidemic is hopefully behind us and the job market is calming down, and of course, there is such a lack of labour. Because it is what is best for everyone, unless they are ill.