Taking 10 years out of work in your fifties could result in missing out on just short of £100,000 in retirement, Standard Life has found.

The group has stated that since the beginning of the COVID pandemic in 2020, there has been a sharp increase in economic inactivity, especially among people aged 50 and over.

This can be down to people, often necessarily, leaving the workforce, due to factors such as ill health or caring responsibilities. Some for, this can be a lifestyle choice that works well for an individual’s circumstances.

Managing director for workplace at Standard Life, Gail Izat, said: "The number of people neither working nor actively seeking work in the UK has increased recently, particularly among the over-50’s. Though ill-health and disability are cited as common reasons for people being economically inactive, the issues behind the great resignation trend are complex and diverse.

"Research from Phoenix Group’s longevity think tank Phoenix Insights - comparing attitudes to work in the UK with Germany and the US - found over 50’s were typically less positive about their experience in the workplace. For employers looking to retain their later-career employees, or keen to attract skilled older workers back into the workforce, considering a flexible working policy including flexible hours, home working and carers leave could help to create an age-inclusive environment."

However, Standard Life has found that for someone who started working with a salary of £25,000 per year and paid the minimum auto-enrolment contributions from the age of 22, the could have a total retirement fund of £434,000 by the age of 66.

If this person took five years out of the workforce at the age of 50, this could fall by £48,000 to £386,000.

For someone who took 10 years out of work, they could lose up to £94,000 by the time they reach 66 years old.

Furthermore, for someone who left the workforce at 50 and didn’t return could end up with £285,000 in their pot, which is almost £150,000 less than if they’d continued to work until 66. This is assumed that the pension pot is left untouched until the age of 66, so these figures could fall even lower if accessed earlier.

Izat added: "While not everyone may be able to continue in work, our analysis shows that taking extended time out from work can lead to people having significantly less in retirement. Factors driving the disparity range from the power of compound investment growth, the fact that people are likely to be better paid later in their career, and that pension contributions in people’s fifties and sixties can be highly valuable."

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