Over-50s in the UK who have been driven out of work due to ill health have just 5% of the wealth of those who have retired early by choice, research has revealed.

A new report published by Phoenix Insights, the longevity think tank set up by Phoenix Group, looked into economic inactivity among the over-50s since the beginning of the pandemic.

According to the report, there is a significant gap in wealth between those who have chosen to retire compared to those who are economically inactive for other reasons such as ill health or caring responsibilities.

The Phoenix analysis showed that the median average wealth – as estimated according to the total of pension, property, financial, physical assets – for 50 to 64 year olds who choose to retire is around £1.24m.

This compares to people who are out of work due to ill health or disability, where average wealth is just £57,000, less than 5% the wealth of those who have chosen to retire. The average wealth of those who are out of work to look after family is £137,000.

Around 27%, or 3.5 million people, aged between 50 and 64 are currently economically inactive, and further analysis by Phoenix revealed this includes around 900,000 who have left work since the pandemic.

Wealth differences suggest older workers who are economically inactive due to illness or caring responsibilities are financially vulnerable, the report highlighted, and at current savings levels are unlikely to be to be able to afford a “moderate” standard of living in retirement.

Director of Phoenix Insights, Catherine Foot, said that the research shows the government should “urgently develop initiatives” to meet the challenges of economic inactivity among the over-50s, or risk a “worsening financial vulnerability” among the UK’s ageing population.

“This should be approached at a local level as there are huge differences in the drivers of inactivity across the UK,” Foot said.

“It’s important not to dismiss economic inactivity in this group as a case of rich baby boomers choosing to enjoy time on the golf course. Stereotypes like this mask real financial and health vulnerability among a group whose successful return to employment will be critical to the UK’s productivity and prospects for economic growth.

“The demographic fact of our ageing population has been hiding in plain sight for decades, warning us that it is critical that we become much more effective at supporting people to stay in good quality work throughout their fifties and sixties. I hope that this focus on reversing economic inactivity will finally help focus minds and action on this very important issue in our labour market.”

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