One in five Britons STILL shunning the workforce despite Chancellor’s bid to coax thousands out of early retirement
The state of Britain’s labour market has ratcheted up pressure on Chancellor Jeremy Hunt as he struggles to convince people to go back to work.
Data from the Office for National Statistics (ONS) showed 21.4 per cent of people were ‘economically inactive’ in the final three months of last year.
‘Economically inactive’ is classed as people who are not in work and have not been seeking or not been available for work.
Early retirement: New data from the Office for National Statistics showed a whopping 21.4% of people were classed as ‘economically inactive’ in the final three months of last year
It covers those who have left the workforce because they are students, retired, have illness or injury, or are looking after family members.
The figure is stubbornly high despite a 0.3 per cent fall between October and December which the ONS attributed to 16-24-year-olds looking for work.
Despite this, inactivity remained above pre-pandemic levels, indicating the trend had become entrenched.
Between November 2019 and January 2020, before Covid struck, inactivity was at a record low of 20.4 per cent.
The rate had been falling steadily since records began in 1971 but increased during the pandemic as people lost their jobs or became ill.
Some older Britons also decided to retire early and rely on their savings and the value of assets such as housing.
Over the October to December period last year, the number of UK adults classed as economically inactive was 767,000 higher than in the first quarter of 2020.
Around 607,000 of these were people over the age of 50, with the 50-64 age group the only demographic over 18 to see continued rises in economic inactivity over the past month.
The Chancellor has implored people to come back, pleading: ‘Britain needs you.’ He said the over-50s could have an ‘enormously rich life by continuing to make a contribution to the economy’, adding: ‘It doesn’t just have to be about going to the golf course.’
New labour data shows unemployment is at a historic low of around 3.7 per cent, prompting business to raise wages, with regular pay up 6.7 per cent between October and December, to lure workers back to jobs.
But such price hikes have fuelled fears of inflation, meaning the Bank of England could consider hiking interest rates further, resulting in higher mortgage and loan repayments for millions of Britons.
Others are warning many older ex-workers could find their incomes placed under pressure by the cost of living squeeze, a factor that did not exist when many quite for good.
Growth is of particular concern for Hunt and the Government after the UK’s GDP flatlined in the final quarter of last year.
The economy is still expected to shrink this year.
