Marvin OnumonuOlder people working past the state pension age contributed over £60bn to the UK economy each year, research from the Centre for Ageing Better found.
This is four times the projected annual cost of the triple lock.
Workers aged 65 and over now make up one in 25 of the UK workforce and their output is around 2% of the country’s GDP.
The economic contribution is three times the annual police budget and bigger than planned yearly increases to NHS spending.
Analysis showed workers past state pension age generated £6.8bn in income tax and employer national insurance contributions (NICs) each year.
The number of workers aged 65 plus has grown fastest among all age groups.
More than 180,000 people joined the workforce in the past year, bringing the total to 1.7 million.
Employment rates for this group have more than doubled since 2000, now at 13.2%.
Recent labour market stats showed workers aged 65 plus earn on average 51% of the median weekly pay of those aged 35-49, up from 40% 10 years ago.
More people aged 65 and above pay income tax now (65%) compared to those aged 16-64 (63%), due to increased participation and frozen tax thresholds.
Dr Andrea Barry, deputy director for work, retirement and transitions at the Centre for Ageing Better, said: “Our analysis of the post state pension age workforce is further evidence that retirement in this country is changing.
“The traditional retirement cliff-edge, where people moved directly from full-time work to no work, is no longer the case for the majority.
“Government policy needs to catch up with this fundamental change.”
Barry added: “The government should undertake a holistic review of its approach for people in their 60s so that policy better reflects the needs of this changed reality.
“It is important to recognise that a record number of workers past state pension age probably has more to do with demographic changes than any great progress or removal of barriers for older workers in the labour market.
“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: “While the 65+ workforce is growing at a strong rate, the sizeable majority leave work before state pension age.
“There are actions that government and employers can take to lower these barriers and ensure that the impact of the post-state pension age group is even greater for the country’s economy.
“More employers adopting, and being encouraged by the government to adopt, a flexible about flexible working approach, paid carers’ leave and work cultures with open discussions about employee health and health support, would all go a long way to ensuring the 65+ age group delivers even more bang for its buck.”
Dr Karen Hancock, economist and research analyst at the Centre for Ageing Better, said: “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 and the social interactions that being in work can offer.
“Those benefits also spread to the wider economy as we see in the significant and growing economic output of this age range.
“And those benefits are also felt by employers as studies have shown that multigenerational workforces are more innovative and productive.”
Hancock added: “The challenge is currently that many of those working past-state pension age are doing so because they want to, while those who have a financial imperative may find it harder to find work.
“Around two in three people working past state pension age say they work for enjoyment, health, purpose or other non-financial reasons while a minority say they stay on for some form of financial reason – for example, being unable to afford retirement (14%) or wanting to improve their finances (21%).
“Many people leave the labour market before state pension age not of their own volition and without sufficient financial resilience to experience retirement without poverty, discomfort and difficult choices.”
