Supporting older people back into work or entrepreneurship must be a key focus if the UK economy is going to reach its full potential.
Their wealth of talent can help drive economic growth and reduce the tax burden on younger generations, a major new report has found.
Access all Areas: Older Workers, argues that there are things we can do to turn the dial and begin to reverse the exodus of older people from the UK workforce that was triggered by the pandemic, by actively helping those that have left to restart their careers or to start a business.
The report, from small business support platform and membership community Enterprise Nation and The Entrepreneurs Network think tank warns that failure to tackle the issue would hold back growth, fuel inflationary pressures, and exacerbate the cost-of-living crisis both for workers and the economically inactive alike.
The report found evidence that there is an appetite to return, with 67 per cent of entrepreneurs over 50 saying now is a good time to start a business.
Emma Jones, CBE, Founder and CEO of Enterprise Nation said: “This report shows that we’re at a crossroads. Do we just accept the ‘new normal’ of higher economic inactivity among our older population, and walk down the path of reduced productivity, persistent inflation, higher taxes and a smaller economy? Or can we take the other route – where older generations actively choose to restart their careers, or set up their own businesses, and make a significant difference to our economy?"
“We believe turning things around is eminently possible, provided the right support is on offer. It’s pushing on an open door."
“While the pandemic was the catalyst for many to leave the labour force, two and a half years have now elapsed and the reality of not earning or not having the structure of a working day is kicking in. Many older individuals have now returned to work in some form, but there’s still further to go."
“We also believe merely returning to pre-pandemic levels of economic activity among older people shouldn’t be the cap of our ambitions – we should seek to create the conditions for as many people to actively contribute to the economy, whether through employment or entrepreneurship, as want to, irrespective of their age."
“Let’s capitalise on this moment and unleash the knowledge and productivity of these individuals back into the economy.”
Eamonn Ives, head of research at The Entrepreneurs Network, said: “The exodus of older workers from our labour force since the Covid-19 pandemic struck means policymakers can’t afford to leave any stone unturned in understanding what can be done to encourage more of them back into work – either as employees or entrepreneurs. This of course means looking at supporting older individuals themselves, but also considering less obvious factors that might explain why they appear reluctant to return – such as tackling high childcare costs. Ultimately, if the economic inactivity rate of older people continues to remain high, we’re less likely to bring down inflation, and push up economic growth.”
According to the Office for National Statistics, the number of people aged 50 to 64 who are economically inactive grew from 3,267,000 in the first quarter of 2020 to 3,556,000 in the first quarter of 2023. That’s an increase of 289,000, or roughly equivalent to the entire population of the city of Milton Keynes.
At the same time, Enterprise Nation’s most recent Small Business Barometer found that the average age of the UK’s small business founder was 46, and that 35% of businesses are started and run by people over 50. These data show that age is no barrier to entrepreneurship and could be a viable option for older people looking to take part in the economy once again.
The report comes up with six recommendations:
1 - Promote Access to Work – a government initiative to help people with physical or mental health conditions to get or stay in work – more widely and extend its reach.
2- Modernise Work Adjustment Passports so that people can submit documentation online.
3 - One of the leading explanations for why older people are economically inactive is because they’re looking after grandchildren. Liberalising things such as child-to-staff ratios at nurseries and other regulations would increase the supply of childcare providers and reduce the cost accordingly. This in turn ought to allow more older people to stay in their jobs, return to the labour force or start some kind of enterprise.
4 - Signpost support that helps individuals start business. Older people often have more financial stability and are less impacted by the rise in interest rates, for example.
5 - Reintroduce and reform the successful New Enterprise Allowance which was closed in 2022 to be more like the previous Enterprise Allowance Scheme (EAS). Analysis from the World Bank estimated that the EAS cost less than £5,000 (adjusted for inflation) for every job it created, and that for every 100 successful participants, 64 additional jobs were created.
6 - Support businesses to tackle ageism in the workplace and during hiring processes and promote an inclusive work culture while offering the flexibility older people prefer.
Cambridgeshire-based Chris Dunn set up his consulting business the day after his 50th birthday in 2014 following years of working in senior commercial roles in medium to large corporates across UK manufacturing and technology industries.
During his employed career, Chris built multi-million pound revenue streams from scratch, set up international sales and service networks and was part of a team that turned a loss-making aftermarket organisation into a profitable business unit.
His broad experience meant he was perfectly positioned to launch his next career move at 50 – and set up his own consultancy firm specialising in business development and change management projects.
Becoming an independent consultant also allowed Chris the freedom and the time to give back via mentoring at the Cambridge Judge Business School and on the Help to Grow: Management course as well as to train as an executive coach.
He said: “I’m passionate about the wider economy benefiting from the skills, knowledge, and experience of older people. Running my own small business over these last nine years has really accelerated my own learning and professional development. "
“It’s also allowed me to truly appreciate the day-to-day challenges the 5.6 million SMEs that power the UK economy are experiencing right now."
“One of which is having access to ‘go to people’ from outside of the company who can act as a ‘sounding board’ for issues and opportunities and offer independent guidance and feedback."
“There are thousands of over 50s just like me who are not ready to retire but instead are actively supporting the next generation of business leaders by sharing their knowledge, skills, and experience in a variety of different ways."
“Many more could do so, and this would in my view ‘move the needle’ on both the current skills shortage and the productivity crisis.”
Download and read the full report below: