Out of work over-50s cut weekly food bill by £60

Almost half of people over 50 who left work during the pandemic have had to cut back on their weekly food shop by £60 a week, new research shows.

The Institute of Fiscal Studies (IFS) said 48% who retired in 2020-21 were now living in relative poverty.

The IFS found they were less likely to receive a pension and had lower levels of well-being than earlier retirees.

It said disruption from the pandemic and perceived health risks may have "forced" many to leave work early.

Older workers between the ages of 50 and 70 were "not retiring in comfort", the IFS said, compared with those who had retired even just a year earlier.

Those who had to trim their spending habits were affected much more than those who had stopped working in previous years, who by and large did not substantially alter their lifestyle after retiring.

Nearly half (49%) had no access to either private or state pensions, compared with 43% of those who were newly inactive in 2019-20.

For a couple to be classified as being in "relative poverty" they would receive an income of less than £15,400.

The study noted that older people who stop working often never re-enter the workforce. "This group may be experiencing long-term poverty and greater hardship in the current cost of living crisis," it said.

The report, funded by the Joseph Rowntree Foundation, will be of interest to the Treasury after Chancellor Jeremy Hunt made it a goal to encourage the over-50s back into the workplace.

IFS research author Xiaowei Xu said it was often assumed that older people who left the workforce during the pandemic were "wealthy individuals retiring in comfort".

"Some of this group might well be amenable to coming back into the workforce and there are signs some are returning already. If the government wants to get this group back to work, the success of policies to support older workers, such as the 'mid-life MOT', will be critical."

But the study found the negative outcomes were peculiar only to those who left the workforce during 2020-21.

The IFS said while an "unusually large" number of people also retired in 2021-22 their living standards and well-being was similar to those pre-pandemic, "suggesting they were more likely to have left the workforce voluntarily and on more comfortable incomes".