Improving employment of workers over 55 could boost UK GDP by £180bn - PwC

Learning lessons from Iceland and New Zealand could help Scotland improve its golden age employment rate and boost its performance across the 12 UK regions, according to PwC’s latest Golden Age Index.

The Index reveals that when it comes to employing over-55s, Scotland ranks 8th (69.6 per cent) in the UK regional table, lagging behind South East of England at 75.3 per cent but ahead of Northern Ireland (63.2 per cent).

The Index - a weighted average of indicators from employment to earnings and training, reflecting the labour market impact of workers aged over 55 - shows that while employment rates of 55-64 and 65-69 year olds have improved in the UK, rising by 8 and 9 percentage points respectively since 2003, it still ranks only 21st out of 35 OECD countries.

Many OECD countries still outperform the UK and have advanced at a faster rate since 2003. PwC’s analysis even indicates that if it was to match New Zealand’s employment rates, UK GDP levels could increase by around £180 billion a year as John Hawksworth, chief economist at PwC, explains: “The UK needs to pick up the pace in increasing employment for older workers to keep up with the likes of Germany, which has climbed the rankings from 21st to 14th place in our Golden Age Index over the past 10 years, while the UK has slipped a place from 20th to 21st.

“There are clear economic gains to be made from getting more over 55s into the workforce and, with automation advancing, it is more important than ever that we ensure older workers are able to participate fully in the UK jobs market.”

According to the Index, Iceland tops the rankings followed by New Zealand and Israel. For the OECD as a whole, PwC says there is a potential $3.5 trillion economic prize from matching New Zealand’s employment rates for the over-55s.

Over the next decade, up to 23 per cent of UK jobs currently held by 55+ workers could be displaced by automation technology, with tasks like clerical support and simple decision making, particularly vulnerable.

This potential risk to older workers over the next 10 years is greater than the average for workers of all ages in the UK (20%) with older female workers facing a higher risk of job automation compared to their male counterparts.

Looking further into the future, technological advancements in jobs demanding physical labour and problem solving of dynamic issues,could further increase the risk associated with job automation, impacting around 32 per cent of older workers by the mid-2030s.

But the report also emphasises that AI and robotics will boost economic growth, leading to new job creation for workers who can adapt to these new technologies.

Mr Hawksworth said: “The ability to adapt to new technologies and a rapidly evolving working environment is crucial for people looking for employment in later life. AI technology can boost economic growth, generate more labour demand and support longer working lives.