The number of over-50s in work is rapidly increasing, so much so that this demographic is set to make up the majority of the UK’s self-employed workforce within the next seven years.
Recent research from the Centre for Economics and Business Research, (CEBR) in conjunction with Hitachi Capital UK, found a rebalancing of the economy away from younger generations, as the 24 million over-50s in the UK become an increasingly important demographic of entrepreneurs and business owners.
More and more over-50s are embracing the challenge of creating their own business and becoming masters of their own destiny – this may be as a result of finding themselves on the ‘employment’ scrapheap later in life, because employment and career advancement prospects for many narrow as they get older, or it might simply be the fact that the over-50s are seeking a new challenge.
Whatever the reason, the findings of the survey suggest that an increasing number of 50-64 year olds choose not to retire and instead stay active in the labour market, with the rate of employment rising significantly between 2012 and 2016 from around 65% to 71%. CEBR projections show that the number of employed 50-64 year olds will surpass 9 million before the end of 2018, and by 2021 there will be 10 million 50-64 year olds in work.
Notably, if the over 50s maintain their lead in growth, they will represent the majority of the self-employed workforce in the UK by 2024.
Businesses owned by over 50s employed more people than those run by younger individuals for the first time in 2016 and this gap is only set to widen in the coming years, according to the study. These figures clearly highlight that age is not a restriction on wealth and employment creation. However, the report also highlights the fact that with the UK economy currently enduring an ongoing productivity crisis, the growing reliance on older generations to drive prosperity could cause concerns among policymakers looking to incentivise younger prospective business leaders to grow their own ventures.
Robert Gordon, CEO of Hitachi Capital UK, said: “With low productivity continuing to affect many areas of the economy, the message from our research is clear: rather than being a drain on the economy, the over 50s are becoming increasingly important drivers of the UK’s economic growth.
“This age group is setting up and running their own businesses at a faster rate than any other age group, directly employing nearly ten million people (two million more than the under 50s) and this gap is only set to widen.
“With the valuable experience, skills and networks that over 50s accrue over the course of their professional careers, this segment of society is a source of growth and prosperity and it is essential that we find more ways to support their economic ambitions if we are to rebalance our economy.”
Kay Daniel Neufeld, Senior Economist at CEBR and author of the report, commented:
“Self-employment among the over 50s has risen much more quickly than it has for younger cohorts, driven by demographic factors such as the rising average age of UK workers, as well as structural changes in the labour market.
“Interestingly, the data suggests that nowadays older workers more often end their careers in self-employment instead of retiring directly. This sometimes involves a change in occupation, but quite often people decide to stick with their industry following a preference to work more autonomously.”
The survey also shows that the change is only relatively recent. As recently as 2009, businesses run by people under 50 employed around 11.1 million people whilst those owned by the over 50s employed less than 50% of that number at 5.4 million. Fast forward to 2016 and these figures show a completely different picture as businesses run by over 50s now employ an estimated 9.8 million people whilst those owned by people under 50 have seen a decrease in employment levels from the 11.1 million above, to an estimated 8 million now.
The economic contribution
We have known for many years that the over 50s market is one of the largest sectors within the economy, but it is a market that is often, at best, sidelined and sometimes, completely ignored, by younger marketing professionals. Here are some more of the remarkable statistics from the report that show just why this approach is wrong and that sidelining the over 50s is not a good move:
- Discretionary spending of the over 50s supports around £119bn of GDP in the economy, compared to £113bn for the under 50s age groups.
- This discretionary spend has increased by an estimated 30% since 2011 and is expected to increase by a further 57% to £187bn in ten years’ time, representing around 38% of GDP at this time.
- It is estimated that this spend supports up to 1.9 million jobs across the economy as a whole – these are jobs that are likely to be affected directly, either upwards or downwards, as this spend changes. This figure is predicted to rise to 2.8 million by 2027.
These figures alone should be enough to make any marketer take note and see what this market has to offer. As readers of Mature Times know, the over 50s are a massive market – ignore them at your peril!