Workers who remain in employment beyond state pension age contribute more than £60billion to the UK economy each year.
This economic contribution is around four times higher than the projected annual cost of maintaining the triple lock guarantee, which the Office for Budget Responsibility (OBR) estimates will reach £15.5billion by 2030.
Output generated by workers aged 65 and above accounts for roughly two per cent of total UK GDP.
The research from the Centre for Ageing Better indicates this contribution is equivalent to around three times the annual policing budget and exceeds planned increases to NHS day‑to‑day spending for the remainder of the decade.
Workers aged 65 and over now make up one in 25 members of the UK workforce, with employment in this group reaching a record 1.7 million people.
This age group is experiencing the fastest employment growth across the labour market in both absolute numbers and participation rates.
Over the past 12 months, more than 180,000 people aged 65 and over either entered or remained in employment.
The employment rate among this group has more than doubled since 2000 and currently stands at 13.2 per cent.
State pension age workers boost UK economy by £60billion annually
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Average earnings for workers aged 65 and over are now around 51 per cent of the median weekly wage earned by people aged 35 to 49, up from 40 per cent a decade ago.
Tax receipts linked to this group remain significant, with income tax and employer national insurance contributions totalling around £6.8billion each year.
This exceeds the tax contribution paid by Tesco (£6billion in 2024–25) and is higher than Amazon’s £5.8billion contribution in 2024.
The report found 65 per cent of people aged 65 and over now pay income tax, compared with 63 per cent of working‑age adults.
The shift reflects higher employment levels among older workers as well as the impact of frozen income tax thresholds
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GETTYDr Andrea Barry, deputy director for work, retirement and transitions at the Centre for Ageing Better, said: “The traditional retirement cliff‑edge, where people moved directly from full‑time work to no work, is no longer the case for the majority.”
She said Government policy “needs to catch up with this fundamental change” and called for a full review of policies affecting people in their sixties.
Dr Barry said record employment figures among older workers may partly reflect demographic change rather than improved workplace access.
“Ageism, health conditions and caring responsibilities are all barriers stopping many more people continuing to work even up to state pension age, let alone beyond it,” she said.
Many pensioners cited the enjoyment of working as a key reason for continuing
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GETTYDr Karen Hancock, economist and research analyst at the Centre for Ageing Better, said remaining in work beyond state pension age can provide personal benefits for some people.
“People working past state pension age in the right work for them can enjoy many benefits including a sense of purpose, cognitive stimulation, order and routine, as well as feeling part of a team,” she said.
Research cited by the organisation found workplaces with multiple generations can be more productive and innovative.
However, Dr Hancock said there remains a divide between those who choose to keep working and those who feel financially forced to do so.
Around two‑thirds of workers beyond state pension age said enjoyment, health or purpose were their main reasons for remaining in work, while around 14 per cent said they continued because they could not afford to retire.
