The number of retired working-age people is actually lower than it was at the start of the pandemic, according to a new report.
In contrast, about one-third have long-term illness.
A study by pension and health consultancy LCP looks at what it calls “great retirement” during the pandemic and seeks to overturn the government’s notion that hundreds of thousands of people have retired early.
This stems from the prime minister’s fall 2022 statement address, which called attention to the 630,000 increase in the “economically inactive” working-age population since the start of the pandemic.
Since Jeremy Hunt spoke out, there has been work across the government to understand the reasons for this phenomenon, and the March 2023 budget will include measures to bring the number of early retirees back into the workforce. is expected to contain
But new data from the LCP shows that when asked, it’s the sick, not the retired, who said they wanted to work.
Since the beginning of the pandemic, the number of long-term illnesses has increased by more than a third of a million people, an increase of 353,000.
According to the LCP, this figure accounts for more than half of the increase in inactivity during this period.
As a result, he warned that the government was trying to tackle the wrong problem.
So the real problem is the risk that the budget will include announcements focused on retirement efforts at a time when more people are stuck with long-term illnesses.
Former Pensions Minister Steve Webb, an LCP partner, warned that “there is a real risk that governments will make the wrong decisions when it comes to slowing down economic activity.”
He said policy solutions aimed at reducing early retirement or encouraging retirees to retire are likely to have limited effect in reversing recent trends.
Instead, policy efforts should focus on understanding why the long-term influx of disease has increased and on early intervention to prevent people’s health from declining.
Webb said: “Without action, we risk expanding the core of people stuck in long-term sickness benefits, with limited prospects of returning to paid work and diminished retirement prospects.”
According to the report, the increase in long-term illnesses appears to be due to a transition to long-term illnesses, especially among people previously categorized as short-term illnesses.
LCP provides long-term health benefits to people who would otherwise have been treated or who could have worked better in managing their chronic illness, either awaiting treatment or living permanently in poor health. He suggested it may reflect pressure from the NHS as he is aware that he is suffering from a serious illness.
Meanwhile, sickness-related benefit figures have risen steadily, and the increase, which had continued before the pandemic, has now worsened.