The Golden Age Index 2023

More must be done to encourage people over the age of 55, and women in particular, to keep working longer in order to boost the economy

That’ s the conclusion of Price Waterhouse Coopers’ (PwC) latest Golden Age Index report, which rankscountries that are best at “harnessing the economic power of older workers.” The is a weighted average of seven indicators affecting the labour market of workers aged over 55 in OECD countries. The index captures a broad range of indicators relating to the participation of older people in employment and training. Three European countries (Iceland, Sweden and Norway) figure in the top five of the index that is led by New Zealand. According to the authors, other countries could achieve large potential economic gains if employment rates for those over 55s could be raised to those of the top performers

The UK ranks 19th out of 34 OECD countries in PwC’s analysis, a drop of one place since last year and below the overall average. The bad news is that their partial analysis of recently released data suggests that the UK’s future position on the Golden Age Index is likely to worsen, because the employment rate of 55-64 year olds improved across most OECD economies from 2021 to 2022, but fell slightly in the UK

The UK’s employment rate for 50 to 64-year-olds is currently 70%, with England faring best at 70.6% and Northern Ireland worst at 63.6%. Regional differences are attributed to economic performance, educational attainment and gender divides

The gender pay gap has also been shown to grow dramatically as age increases, a significant barrier to older women staying in work

“As the number of people over 55 continues to grow steadily and life expectancy increases, the UK needs to make it as easy as possible for people to continue working for longer if they wish to do so. This would boost both GDP and tax revenues, so helping to pay for the increased health, social care and pension costs of an ageing population,” said John Hawksworth, PwC’s chief economist

The average age in the UK exceeded 40 for the first time ever in 2014, and it is predicted that nearly one in seven will be over 75 by 2040. Andy Briggs, the government’s business champion for older workers, called in February this year for the number of workers aged between 50-70 to increase by one million over the next five years

The International Monetary Fund has also estimated there will be a significant drop in productivity growth in the Euro Area in the medium- to long-term, as the number of retired citizens grows and the average age of workers increases

Analysts predict that the UK could increase its GDP by roughly 4.2% (about £80 billion by current values) if the employment rate of older workers increased 12 percentage points to match Sweden’s, which sits in fourth place

Significantly more men (75.4%) aged between 50-64 are employed, compared with women (64.9%). According to PwC, older women disproportionately suffer bars to sustainable employment such as lower pay and more part-time work

Indeed, the gender pay gap increases from an average of £28 per week for 22-29 year olds to £153 for 50-59 year olds. Meanwhile, regions with more highly educated workers tend to have higher older-worker employment rates

“For employers, flexible working and partial retirement options can pay dividends, as can redesign of the workplace to meet the needs of older workers,” said Carol Stubbings, global people and organisation leader at PwC

“Flexible working policies can incentivise women to remain in work longer, so having the right policies in place will increase the employment rate of those over 55 and may help to reduce the gender pay gap which is shown to increase with age,” she said

PwC propose 4 levers by which the UK’s position can be increased:

improved access to better healthcare,
both government and businesses should ensure that older workes get training and career guidance to gain additional skills,
businesses should capitalize on the progress made in flexible work pattern sduring the pandemic to better enable older workers to participate effectively in the labour market, and
even is older workers are keen to participate in that market, unless businesses create opportunities for those workers

Unfortunately, the report concludes, institutional, age-based discrimination remains widepread, with only 42% of managers being willing to hire people aged between 50 and 64

Government and business need to work together to ensure that this disgraceful situation is resolved