The answer to Britain’s economic woes? Make pensioners work longer
The UK could have a stronger economy if it encouraged its older population to stay in the workforce, a new report has found.
The World Economic Forum has ranked the UK 19th out of 124 nations on an index that measures how well countries “nurture, develop and deploy their great asset – its people” with a focus on education, skills and employment.
With an overall score of 79.07pc, the UK capitalises on its population better than such economic powerhouses as Germany and China, but fails to match up to many of its peers including the US, France and Japan.
The UK slipped down the index because of its weak score in the 65 and over age group, coming 47th in this category, dragged down by a particularly low labour force participation rate of 10.2pc that saw 86 other countries fare better than the UK.
An underemployment rate of 3.7pc, ranking the UK just 38th on the global index, suggests that the silver population is lacking in job opportunities for those who want to work.
The UK ranks just 38th for employment opportunities for those aged 65+ who want to work
“There’s always a lot of focus on youth unemployment and disillusionment which has a long term effect on a country,” Saadia Zahidi, head of the WEF’s Employment, Skills and Human Capital Initiative and co-author of the report, said. “But the same issue applies to women and older workers as well.”
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The average age of retirement in the UK is 64.7 for men and 63.1 for women, but ministers believe it should be higher to prevent healthcare and pensions crises caused by the ageing population and have previously indicated that they would like the average retirement age to rise by as much as six months every year.
A recent report from the Department for Work and Pensions found that an extra £25bn would be generated if just half of the older people seeking work were given jobs.
“Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century,” said Klaus Schwab, founder and executive chairman of the World Economic Forum. “To make any of the changes necessary to unlock the world’s latent talent – and hence its growth potential – we must look beyond campaign cycles and quarterly reports.”
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Ms Zahidi added: “Our goal is to support business leaders, policy-makers, civil society and the public in taking the informed, data-driven decisions that are needed to unlock human potential. The index shows that all countries – both rich and poor – have yet to optimize their human capital and calls for a new people-centric model of growth.”
Finland took first place on the WEF’s Human Capital Report (pictured: Helsinki)
Finland topped the ranking, which the WEF claims is the only global report of its kind, with a score of 85.78pc, followed by Norway and Switzerland. Canada, which is the world’s best at maximising its 15 to 24 age group, took fourth place, while Japan rounded out the top five thanks to its chart-topping deployment of people over the age of 65.
The average 65-year-old Japanese person can expect to live a further 10 healthy years, compared to just six in the UK.
Julio A. Portalatin, president and chief executive officer of Mercer, which produced the report in collaboration with the WEF, called the Index “a critical tool for global employers”.
He said: “It allows them to determine the most pressing issues impacting talent availability and suitability around the world today and identify those issues that have the potential to impact business success in the future – invaluable insight for guiding the allocation of workforce development and investments.”