London Daily

Focus on the big picture.
Thursday, Oct 22, 2026

Cost of living crisis may have driven record numbers of pensioners back to jobs

Cost of living crisis may have driven record numbers of pensioners back to jobs

Since the end of the pandemic and the reopening of economies around the world, labour markets have become tighter, in the jargon.

In short, in developed economies such as Europe and the United States, there are fewer workers available.

Much of this was put down to the so-called great resignation as workers decided, after the pandemic, not to return to work.

That could have been for a number of reasons, including so-called long COVID or the need to care for relatives suffering from long-term symptoms of the virus, but the biggest driver is thought to be because a number of people reappraised their lives. They decided they could afford to retire and were happy to do so.

That latter factor in particular was used to explain why, between the final three months of 2019 and the final three months of 2021, some 493,000 Britons aged 50 or over dropped out of the labour force.

Intriguingly, however, data released on Monday suggests that some of those workers may now be returning to the jobs market.

The Office for National Statistics (ONS) reported that, during the three months to the end of June, the number of people aged 65 and over in employment increased by a record 173,000. It said a record 1.468 million people aged 65 and over are now in work.

It suggested this was due to a rise in part-time working and especially in "the industries where informal employment is more common, such as hospitality and arts, entertainment and recreation".

The ONS said that, of the 173,000 older workers joining the labour force during the quarter, 85,000 were part-time employees and a further 76,000 were part-time self-employed people.

Its figures suggest that, statistically speaking, someone aged 65 or over who is still working is far more likely to be working part-time than full-time.

Accordingly, because most such workers returning to the labour force are working part-time, the average number of hours typically put in by someone aged 65 or over is actually falling. Typically such workers put in between 16 and 30 hours a week.

What the ONS did not look into in this survey is why such workers are returning to the labour force in such numbers.

It is tempting to speculate that many older workers have decided that working on a part-time basis, when they can enjoy a little flexibility, is good for the soul. Many of them will have been hearing increasingly, towards the end of their careers, about the importance of work-life balance.

Another likely factor is that employers are doing more to lure back older workers by, for example, offering them flexible working.

They are also offering higher wages than previously: the ONS reported recently that, in June, one in eight businesses raised wages - and that rose to nearly one in four in those industries, such as hospitality and healthcare, where part-time working is established.

The chances are, though, that in most cases this return to the jobs market is being driven by the cost of living crisis.

A lot of people living on fixed incomes, either occupational or state pensions, will have found that those incomes do not go as far at a time when the headline rate of inflation is more than 10%.

Others, typically those on defined contribution - "money purchase" in the jargon - pensions, will have noted how their retirement savings have been eroded by this year's reverses in the stock market and come to the conclusion that they, too, need to supplement their retirement savings.

Either way, it is a development that will be welcomed by the government, not to mention employers.

Dame Sharon White, the chair of the John Lewis Partnership, recently called on ministers to do more to encourage older workers back to the labour force to ease strains in the jobs market.

Dame Sharon, an economist who earlier in her career was a former senior official at HM Treasury, argued that the shortage of older workers was feeding inflation because it was creating skills shortages.

So this development will also be welcomed by the Monetary Policy Committee at the Bank of England which, next week, is expected to vote to raise interest rates again.

Newsletter

Related Articles

0:00
0:00
Close
Parliamentary Inquiry Highlights Urgent Need to Address Housing Shortage as Scottish Completions Hit Eleven-Year Low
United Kingdom and Singapore Sign Comprehensive Financial Agreement to Deepen Digital and Sustainable Market Ties
Greggs Announces Plan to Close Four Manufacturing Facilities and Cut Seven Hundred and Forty Jobs
International Monetary Fund Raises United Kingdom Economic Growth Forecast While Warning of Inflationary Pressures
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs Onto Gas to Lower Household Bills
Housebuilding Across Scotland Plummets to Eleven-Year Low Despite Government Pledges to Tackle National Housing Emergency
Greggs Announces Factory Closures Across Northern England and Scotland Affecting Seven Hundred Forty Jobs
United Kingdom and Singapore Conclude Eleventh Financial Dialogue in Singapore to Deepen Cooperation on Digital Finance and Capital Markets
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs to Gas Bills and Tap Windfall Profits to Lower Consumer Prices
British Broadcasting Corporation Announces Major Cost-Cutting Overhaul to Close Linear Broadcast Services for Television Channels BBC Three and BBC Scotland Alongside Digital Radio Station BBC Radio Four Extra
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
×