Press Archive
£31 billion per year: the cost to the UK economy of our failure to tackle ageism
27 April 2001
  • By 2025, for every two people employed there is likely to be one person older than 50 who is either retired or inactive
  • Flexible Retirement could boost the economically active population by 3 million, which could raise the GDP by £50 billion or more per year
A year after the Government released its Winning the Generation Game* strategy on tackling unemployment among the over-50s, a hard-hitting report published today (27 April) by the Employers Forum on Age warns that the cost of ageism has risen to a staggering £31 billion in lost GDP per year - a rise of £5 billion since 1998 .

The report, Ageism: Too Costly to Ignore, reveals that in the last two years the number of people aged between 50 and 64 who are not in work and are currently not seeking work has grown by 125,000. It argues that if the UK's ageist culture is to be successfully challenged then the Government must focus on and secure tangible change in three key areas:
  • Fiscal incentives must be used to replace the concept of a 'retirement age' with an extended and staged period of departure from the labour market, i.e. flexible retirement
  • Employers must be encouraged to overcome stereotypes and develop a more enlightened appreciation of the contribution that older workers can make to the success of the businesses
  • Older workers must be aided, with appropriate incentives, to increase their employability by investing in their skills
The findings also show that flexible retirement could boost the economically active population by 3 million or more, all be it on a part-time basis, which could raise GDP by £50 billion or more per year.

Sam Mercer, campaign director of the Employers Forum on Age, says: 'The Government is acutely aware of the gravity of the problem and its concern has been heightened by the knowledge that the population is rapidly ageing. But while it has signed up to the EU directive to outlaw ageism in employment by 2006, it has failed to meet many of its own deadlines. One year on, it would appear that the Government is only beginning to recognise the true scale of the task it set itself in committing to the recommendations in Winning the Generation Game.'

Séan Rickard, of the Cranfield School of Management and author of the report, says: 'The combination of fewer young people entering the workforce, an ageing population and falling participation rates among the over 50s will actually reduce the numbers in employment by 2025. This will magnify the already significant problem of skills shortages, with an associated and negative impact on UK competitiveness, GDP and living standards for all.'

Over the next 25 years the proportion of the population aged 50 and above will rise from 33 to 41 per cent: an increase of six million. Over the same period the numbers aged between 16 and 50 will fall by 1.5 million. If the proportion of those aged 50 and above who are economically inactive remains unchanged - and it has been rising for more than 20 years - then over the next 25 years 'disguised unemployment' in this age group will rise by almost one million. This will mean that by 2025 for every two people employed there is likely to be one person older than 50 whom is either retired or inactive.

* Winning the Generation Game, Performance and Innovation Unit, 27 April 2000

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