The numbers of people not working and not looking for a job have increased by around 600,000 during the pandemic, growing Britain’s so-called economically inactive group to nine million working-age people. This report sheds light on this rise in economic inactivity showing that, while it was initially driven by a rise in people taking early retirement, people have a diverse range of reasons for not working.

The research finds that the growth in people leaving the workforce is part of a longer-term demographic crunch, with 1.4 million more people projected to retire over the next 17 years than young people will enter the workforce. By the 2040s, there will only be 2.3 people of working age for every person above state pension age, down from 3.5 in the 2010s. Expanding our workforce by helping more people with health conditions and caring responsibilities to work will be key to avoiding labour shortages over the coming decades. And employers will have to overcome any ageism to make sure they can employ the best people for their roles.

There has also been a sharp rise in the number of people with long-term sickness, reflecting a rise in ill health in the population, the impacts of the pandemic, plus lengthy NHS waiting lists. In addition, there are huge geographic variations: the proportion of people aged 16 and over and economically inactive due to long-term sickness varies from 1 in 100 in parts of Surrey to 1 in 7 in parts of Merseyside.

The analysis also highlights stark class and gender divides. Better paid and male dominated roles like managers and directors, IT professionals and other professional roles account for around one in three people who took early retirement. By contrast, people from lower paid, traditionally female dominated roles, were more likely to give up work for health reasons: housekeeping; caring personal services; cleaning; and other elementary services occupations account for over one quarter of such moves.