Over-50s who retired at start of Covid much poorer, says IFS

People over 50 who left work during the pandemic are "much poorer" in general than other retirees, research suggests.

The Institute for Fiscal Studies (IFS) said 48% of those who retired in 2020-21 were now living in relative poverty.

They were less likely to receive a pension and had lower levels of well-being than other retirees, the IFS found.

It said disruption from the pandemic and perceived health risks may have forced many to leave work early.

Older workers between the ages of 50 and 70 who left in the first year of the pandemic were "not retiring in comfort", the IFS said, compared with those who had retired even just a year earlier.

The report, which was funded by the Joseph Rowntree Foundation, found that those who had retired in 2020-21 cut their spending on food by about £60 per week on average.

Are you over 50 and left your job during the pandemic?

Nearly half (49%) had no access to either private or state pensions, compared with 43% of those who were newly inactive in 2019-20.

For a couple to be classified as being in "relative poverty" they would receive an income of less than £15,400.

The study noted that older people who stop working often never re-enter the workforce. "This group may be experiencing long-term poverty and greater hardship in the current cost of living crisis," it said.

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IFS director Paul Johnson told the BBC's Today programme that those who left the workforce in 2020-21 were "much poorer" compared with those who had retired a year later.

"Roll on a year and you've still got a lot more people than usual leaving the labour market but they look much more like pre-pandemic and they're more likely to be the people playing golf, relatively well-off, with a private pension," he said.

Mr Johnson said it had historically been the case that few people returned to the workforce once they had become inactive or retired at "those kinds of ages".

"People can quite quickly become disengaged from the workforce and we also know there's been a very big increase in sickness among this group, both self reported and the number who are receiving disability benefits."

The past couple of years have seen many firms complaining about a shortage of workers, and total job vacancies still remain above one million. Chancellor Jeremy Hunt has made it a goal to encourage the over-50s back into the workplace.

The government said it was helping older workers return to the workforce and that "inactivity had fallen by nearly 300,000".

"We have committed £70m in back-to-work support for the over-50s including a new online Midlife MOT launched this week," a spokesperson said.

How can I save money on my food shop?

• Look at your cupboards so you know what you have already

• Head to the reduced section first to see if it has anything you need

• Buy things close to their sell-by-date which will be cheaper and use your freezer

Read more tips here