‘Financial desperation’ drives over-50s back to work

Over-50s who took early retirement during Covid are being forced to return to work due to ‘financial desperation’, said James Reed, one of Britain’s top recruitment executives.

The skyrocketing cost of living has led many older workers to give up on their dreams of a leisurely life, he said. Financial fears have made them rush to return to the workplace.

This has led to an increase in job applications, with the number of inquiries on the Reed Group website rising 40 percent in the month of July compared to a year ago.

The 60-year-old Reed, who runs the job center founded by his father Sir Alec, said a significant part of this trend is due to people in their 50s and 60s trying ‘not to retire’ because of high inflation . The consumer price index fell to 7.9 percent from 8.7 percent earlier this month, but is still well above the Bank of England’s target of 2 percent.

“Over-50s say to themselves, ‘I just can’t afford this anymore, I have to go back to work,'” he said.

In his fall statement, Chancellor Jeremy Hunt pointed to a 630,000 increase in the number of working-age people 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 leave paid work after living a relaxed lifestyle during the Covid lockdowns.

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

Since Covid, the number of over-50s not working or looking for a job has risen by nearly 400,000. Many had built up savings during the lockdowns when they couldn’t go on holiday or eat out.

But household budgets have come under significant pressure over the past year due to rising mortgage rates and rising food and utility bills.

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

“If you calculate what you need to live on in 2020, and compare that to what you need to live on in 2023, it becomes a very different number,” Reed said.

“That’s why many people are rethinking their early retirement plans.”

‘There is nothing left to save’

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

A former bookstore owner, she now sells goods online and works over 40 hours a week to make ends meet.

“I don’t think I can ever retire at this rate,” she said.

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

“I’ve cut back as much as I can, but I’m not sure what else I can cut back on.”

The Center for Aging Better has found that the average person aged 50 to 64 is about £250,000 short of a pension pot that will provide the income they want.

Dr. Emily Andrews, deputy director of employment at the organization, said: “There are a lot of people who are retiring and have a lot less money than they expected.”

The government is aiming to get over-50s back to work to solve the chronic labor shortage that is holding back the economy and threatening to push inflation further up.

Ministers may welcome the increase in applications from older workers, but Reed said it would be better if mature people returned for positive reasons “rather than financial desperation”.

Unemployment is at an all-time low of 4 percent, but Reed warns that job seekers are finding it increasingly difficult to find work.

He said he was concerned about data on his website showing that the number of available jobs fell by more than 20 percent between April and June.

“This is against Bank of England guidelines that we are going to avoid a recession,” he said.

“After the pandemic, we had a great job boom. That’s over, though.’

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

As the economy emerged from the pandemic, labor shortages meant workers began to feel in control by demanding bigger pay increases and the right to work from home.

“But the tide has turned,” he added. ‘The market is now significantly different from a year ago.’

In addition to raising the alarm on the job market, Reed also tries to attract high net worth 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 buy another supercar.

He said: ‘Once you buy a Ferrari, you might buy another one or even start collecting Ferraris.

‘But once you have 15, the pleasure you get from buying a sixteenth is pretty minimal. I never had that experience, but it wouldn’t mean much to me.’

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

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

“Ninety-nine percent (of Britons) are more generous than the 1 percent and we want to help solve that problem,” he said.