Brexit continues to dominate the headlines, and split opinion. Recent opinion polls suggested that approximately 45% were in support of Brexit, about 45% were against and about 10% were unsure. As we’re a politically neutral organisation, we hold no official position for or against Brexit, however we are keen to consider the various issues at play that could affect our customers.
Two recent official reports are relevant to many of our older customers as the UK and EU negotiations progress.
How many older Brits live elsewhere in the EU?
Firstly, the Office for National Statistics has recently published figures showing the number of UK citizens aged 65 and over who live in other EU countries. A key UK/EU negotiating point is to ensure clarity for UK citizens living elsewhere in the EU, and for other EU citizens living in the UK.
The ONS data reports that number of UK citizens aged 65 and over living in the EU outnumber the reverse by a factor of three-to-one. There are reported to be 247,000 British citizens aged 65 and over living in other EU countries (excluding Ireland), and 85,000 people aged 65 and over from other EU countries (excluding Ireland) living in the UK.
Spain is the number one destination for Brits aged 65 and over when living in the EU - with 121,000 people in this situation. This is followed by France and then Germany.
Two countries that buck the trend are Italy and Poland. There are more older Italians and Poles in the UK than older Brits in Italy and Poland.
Many Brits living elsewhere in the EU will be in receipt of a British State Pension. The terms by which these people continue to receive their pension will be one of the points under Brexit consideration.
The fluctuation of the value of the Pound and the Euro will also have implications for the spending power of the State Pension elsewhere in the EU. The Pound has fallen in value by about 15% since the referendum result, and this has negatively impacted the spending power of the British State Pension abroad.
The 247,000 Brits living elsewhere in the EU will understandably be keen to see how the Brexit negotiations progress.
Brexit and the possible growth in employment amongst older workers
The jobs market is thriving in the UK today. The latest figures show that our employment rate is at an all-time high and that unemployment hasn’t been this low since 1975.
A recent Bank of England speech stated that “over the last five years, roughly 60% of jobs growth and all the growth in the workforce has been accounted for by people born outside the UK”.
Brexit – and an end to the free movement of people - raises uncertainties about the future supply of labour from the EU.
A slowdown in the supply of labour from the EU
There has already been some evidence of a slowdown in this supply. The Bank of England reported that the number of people born in other EU countries and working in the UK rose just 2% last year, whereas it rose 16% in the 12 months up to the Brexit referendum in June 2016. Brexit uncertainties may have been one cause; as could recent improvements in employment levels elsewhere in the EU and the depreciation of the pound reducing the value of sterling wages.
If the supply of labour from abroad is to reduce, British employers will want to look elsewhere to meet their needs. This may encourage them to look closer at older workers.
Britain is ranked “mid-table” in its employment of older workers
According to Eurostat, 66.4% of Brits aged 55-64 are active in the labour market. This is above the EU average of 59.7%, and places us at a “mid-table” 12th in the overall list of Eurostat countries. Iceland tops the league table with an impressive 86.8%.
Top 12 labour participation rates of those aged 55-64 (Q1 2017)
Iceland – 86.8%
Sweden – 80.3%
Switzerland – 73.8%
Norway – 73.5%
Germany – 71.5%
Estonia – 71.1%
Lithuania – 70.6%
Denmark – 69.9%
Netherlands – 69.0%
Finland – 66.9%
Latvia – 66.4%
United Kingdom – 66.4%
66.4% is a solid figure but it compares poorly to other age groups in the UK. For example, for those aged 25-49 the participation rate is 20 points higher, at 86.5%.
Brexit to accelerate a trend of increasing older worker participation?
Increasing levels of older worker participation has been a trend over recent years. This was to be expected as life expectancy increased and as the baby boomers moved through the working population. Today, there are nearly 10-million workers in the UK aged 50 and over. This is nearly twice the number seen in 1997.
The participation levels have shown an upward trend over the past decade but remain stubbornly and significantly below the levels seen across other ages.
UK labour participation rates of those aged 55-64 – 2007 to 2017 (Q1s) (Source Eurostat)
"If" Brexit brings a reduced supply of labour from abroad, and "if" there continues to be demand for more labour in the UK, Brexit could be the key that unlocks the full potential of older workers as employers look to fill the gap.
We will continue to watch all Brexit developments to ensure your interests are best served.
 Source: http://ec.europa.eu/eurostat/web/lfs/data/database?p_p_id=NavTreeportletprod_WAR_NavTreeportletprod_INSTANCE_IFjhoVbmPFHt&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_p_col_id=column-2&p_p_col_count=1
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