People leaving the workforce between age 50 and state pension age could wipe £88bn from the economy, the ONS has warned.

If the employment rate among 50 to 64-year-olds was similar to those aged 35 to 49 years, it could add 5% to GDP or £88bn, the ONS added.

Furthermore, it said women are much more likely to be economically inactive before state pension age than men. At age 50 years, 17.9% of women were economically inactive compared with 9.6% of men. At age 64, 58.6% of women were economically inactive compared to 44.9% of men.

AJ Bell head of retirement policy Tom Selby said: “The early exit of people aged between 50 and state pension age from the workforce has a significant impact on both individual retirement plans and the wider economy.

“While in some cases stopping work early will be a voluntary decision – for example as a result of early retirement – in other situations it will be less voluntary, such as ill-health.
“Worryingly, although perhaps not surprisingly, people who work in low-paying or physically intensive sectors are six times more likely to stop working before state pension age because of ill-health than those working in other professions. What’s more, women are more likely to stop working early than men, potentially further perpetuating the gap in pensions between the sexes.

"Stopping working in your 50s – when in theory your earning power and ability to save should be at its highest – could also have a significant impact people’s retirement outcomes.
In many cases it will mean making your retirement income stretch for much longer, meaning you have to live for less in your later years. It also potentially impacts on people’s health and wellbeing. For all those reasons, supporting people in their 50s to stay in work for longer should be an absolute priority for policymakers.”

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