‘Financial desperation’ driving over-fifties back to work

Counting the cost: Older workers having to abandon their dreams of a life of leisure

Over-Fifties who took early retirement during Covid are being forced back to work by ‘financial desperation’, according to one of Britain’s top recruitment agency bosses James Reed.

The rocketing cost of living has resulted in many older workers having to abandon their dreams of a life of leisure, he said. Financial fears have sent them scrambling to return to the workplace.

This has led to a surge in job applications with the number of enquiries on the Reed Group’s website up 40 per cent for the month of July, compared with a year ago.

Reed, 60, who runs the employment business founded by his father Sir Alec, said a significant part of this trend is down to 50 and 60-somethings trying to ‘un-retire’ due to high inflation. The consumer price index fell to 7.9 per cent from 8.7 per cent earlier this month, but is still far above the Bank of England’s 2 per cent target.

‘Over fifties are saying to themselves ‘I just can’t afford this any more – I need to get back to work’,’ he said.

In his autumn statement, Chancellor Jeremy Hunt pointed to a rise of 630,000 in the number of people of working age who have become ‘economically inactive’ since the start of the pandemic.

Experts dubbed it The Great Retirement as many of them were older people who had chosen to opt out of paid work having enjoyed a leisurely lifestyle during the Covid lockdowns.

Hunt wants to lure them back to work to boost the economy.

Since Covid, the number of over-fifties neither working nor job hunting has soared by almost 400,000. Many had accumulated savings during the lockdowns when they were unable to go on holiday or eat out.

But household budgets have been squeezed significantly over the past year due to escalating mortgage rates as well as spiralling food and energy bills.

It means that many of the older workers who believed they could afford to retire early are now having second thoughts.

‘If you were calculating what you needed to live on in 2020, and compare that with what you need to live on in 2023, it is going to be a very different number,’ said Reed.

‘That’s what is causing a lot of people to rethink their early retirement plans.’

Melanie, a self-employed 70-year-old in West Yorkshire, is just one of the many who falls into this cohort. She told The Mail on Sunday that she has been forced to continue working to keep the lights burning and food on the table.

A former bookshop owner, she now sells goods online and is working more than 40 hours a week to stay afloat.

‘I don’t think I’ll ever be able to retire at this rate,’ she said.

Wishful thinking: Melanie, 70, has been forced to continue working

‘My wishful thinking of being able to sit back and read books isn’t going to happen.

‘I’ve cut back as far as I can, but I am not sure what else I can cut back on.’

The Centre for Ageing Better has found that the typical person aged 50 to 64 is about £250,000 short of a pension pot that will deliver their desired income.

Doctor Emily Andrews, deputy director for work at the organisation, said: ‘There are many people who find themselves facing retirement with much less money than they were expecting.’

The Government is striving to cajole over-fifties back to work in order to solve chronic staff shortages which are holding back the economy and risk pushing inflation up further.

Ministers may welcome the increase in job applications from older workers, but Reed said it would be better if mature people were coming back for positive reasons ‘rather than out of financial desperation’.

Unemployment is at a historically low rate of 4 per cent, but Reed warns it is becoming harder for job hunters to find work.

He said he was concerned by data on his website that revealed the number of jobs available slumped by more than 20 per cent from April to June.

‘This conflicts with the Bank of England’s guidance that we are going to avoid a recession,’ he said.

‘After the pandemic, we had this amazing jobs boom. However, that is over.’

He said the balance of power has been shifting so that employers now have the upper hand.

As the economy emerged from the pandemic, labour shortages meant that workers began feeling able to call the shots by demanding larger pay rises and the right to work from home.

‘But the tide has turned,’ he added. ‘The market is significantly different now than it was a year ago.’

As well as sounding the alarm on the labour market, Reed is also trying to attract wealthy donors to his charity The Big Give.

He has called on Britain’s richest to help those struggling with the cost of living crisis rather than purchase another supercar.

He said: ‘Once you have bought one Ferrari, you might buy another or you might even start to collect Ferraris.

‘But once you have got 15, the pleasure you get from buying a sixteenth is pretty minuscule. I’ve never had that experience, but it wouldn’t do much for me.’

His philanthropic efforts helped The Big Give to raise £42 million last year, taking the charity’s tally to around £250 million since its launch 15 years ago.

Reed now wants to hit £1 billion by 2030 as he strives to ‘make the rich more generous’.

‘Ninety-nine per cent [of Britons] are more generous than the 1 per cent and we want to help solve that problem,’ he said.

This post first appeared on Dailymail.co.uk