Retirement as a response to Covid-19

I was presenting a talk at the Health and Wellbeing at Work Conference at the NEC in Birmingham. It was March 2020.

Outside of the talks, the space was buzzing with discussions about the virus that had spread from China and caused deaths, quarantines and a state of emergency in Italy. We were speculating and bracing ourselves for what was to come.

Ten days later, the first nationwide Covid-19 lockdown was imposed on the UK. I spent the first week in my garden (and I came to appreciate what a privilege it was to have this space). I was a self-employed consultant and trainer, and the restrictions brought my work to a halt. I contemplated how I would spend the coming weeks or months, and a possible future in which I no longer worked. There were aspects of my working life that I would not miss, such as living out of a suitcase. 

Within a few months I began delivering services online. At the end of 2022, at the age of 50, I ceased work. Since then I have adopted alternative roles (including sword fighter!).

'Where have all the workers gone?'

I was not alone in retiring early during and after the pandemic. A week after I delivered my final training course, the Economic Affairs Committee of the House of Lords published a report entitled 'Where have all the workers gone?'. The Committee was investigating the labour shortages hampering UK businesses and the wider economy. Using data from sources such as the Office for National Statistics and the Institute of Fiscal Studies, the report suggested that 'the reduction in labour supply has been driven by an increase in economic inactivity, in particular amongst 50–64-year-olds who do not wish to return to work… The biggest contributor to this rise in inactivity has been increased earlier retirement, not increasing long-term sickness.' A similar phenomenon has been noted in academic studies in the Czech Republic (Dvořáková, 2022) and a large-scale household survey in the US, which showed a 7 per cent increase in early retirement (Monahan et al., 2020). 

Unusually high numbers of people were also changing jobs during the pandemic, rather than leaving the workforce. 47 million Americans voluntarily quit their work in 2021, the largest number on record (Fuller & Kerr 2022). Journalists, academics and professional bodies started referring to the 'Great Resignation', a term attributed to Professor Anthony Klotz by the World Economic Forum (WEF 2021). Gallup (2021) suggested that the 'Great Reshuffle' may be a more accurate label for the phenomenon.

Factors influencing early retirement decisions

The Lords' report (p.32) recommended that 'the Department for Work and Pensions should consider… what measures could be taken, whether by the government or employers, to encourage future age cohorts to remain in the workforce'. Retirement is a highly individualised decision (van Erp et al., 2014). As such, it would be impossible to list all the factors that influence early retirement decisions. Nonetheless, some themes emerge from the literature. 

During the pandemic some older workers may have viewed early retirement as a way of protecting themselves from life-threatening or life-changing illness (Monahan et al., 2020, Settersten et al., 2020). A similar message emerged from a study (Rinsky-Halivni et al., 2022) based on the Survey of Health, Ageing and Retirement in Europe (SHARE). This found that nearly a quarter (24.5 per cent) of ageing workers experienced a decline in their mental health during the pandemic and the strongest predictor of ill health was a perception that the workplace was unsafe. 

An obvious inference, relevant for any organisation at any time, is that workers may feel less vulnerable, and less inclined to retire, if they have more clarity and confidence in how they are being protected in the workplace. Effective consultation can allow workers' unique concerns and experiences to be taken into account, and this is a key principle of how health and safety should be managed in the UK (enshrined in the Health and Safety at Work etc. Act 1974 as well as secondary legislation).

As healthier workers retire at an older age (Mein et al., 2000; Harkonmäki et al., 2006, Dvořáková, 2022) retirement decisions could be influenced by identifying and addressing occupational factors that adversely affect physical and mental health. For example, excessive emotional demands, which could be caused by role conflict, and poor psychosocial working conditions have been found to predict early retirement (Sonnega et al., 2017, Sundstrup et al., 2021). Another study drawing from the SHARE data found that home and hybrid working, which became more commonplace during the pandemic, had a particularly adverse effect on the mental health of older female workers (Katarzyna & Grzegorz 2024). The authors attributed this to 'strong work–family conflict due to blurring of boundaries between work and home, role confusion, and new housework demands' (p.84; see also Cui et al., 2024).

Physical work demands need to be tailored to the changing physical health and capabilities of older workers, otherwise those demands can become excessive and encourage workers to retire earlier (Sonnega et al., 2017; Sundstrup et al., 2021). Occupational health programs could be introduced to maintain or enhance employees' physical health (Wilson et al., 2020). 

In short, workers may consider retiring early if they feel vulnerable (whether physically and/or psychologically) or face excessive physical or psychological demands, which can have an adverse impact on their health. This is unlikely to be a startling revelation for our own or allied professions.

How is this relevant for Psychologists?

Organisations may need support to meaningfully listen and respond to the individual concerns and needs of their workers, thereby avoiding an inadequate 'one-size-fits-all' response to a potential early retiree (Vidovićová, 2015). For example, older workers may have new caring responsibilities and consider giving up work to complete care tasks (Woźniak et al., 2022). A stock response, such as an increased salary, may not be particularly helpful. However, and as Katarzyna and Grzegorz (2024) identified, home or hybrid working arrangements might not be as suitable as they can first appear. Instead, a flexible response, accounting for the worker's unique circumstances, reduces early retirement intentions by helping workers manage role conflicts (Cui et al., 2024).

Psychologists can also draw from a range of theoretical frameworks, discussed later, to help organisations create better working arrangements that will encourage workers to extend their working lives.

Organisations should be receptive to this assistance. When someone quits, a replacement must be hired and trained, during which time productivity suffers, there are greater demands on the remaining team which can negatively affect their performance and attitude towards their work and workplace, and so on. Consequently, Gallup (2021) estimated that the cost of replacing a worker is 1.5-2 times their annual salary.

But was there really a Great Resignation?

In 2023, the Personnel Review had a special issue dedicated to the Great Resignation. Contrary to the other contributors, Marks (2023) questioned whether this was a real phenomenon and challenged the quality of the sources and data that academics were using. She is not alone in taking this position. Fuller and Kerr (2022), for example, argue that the high levels of voluntary resignations in America in 2021 represented the continuation of a general trend rather than an anomaly. 

There seems little doubt that early retirement rates increased during and after the pandemic. However, it is normal to see increased levels of early retirement during a recession (Dvořáková, 2022; Morrow-Howell et al., 2020), and the economic shock caused by Covid-19 (rather than the pandemic itself) may have prompted an expected increase in early retirements (Chartered Institute of Professional Development 2022). 

Nonetheless, the report to the Economic Affairs Committee (p.31-32) proposes some unique aspects of the pandemic that contributed to early retirement decisions: 'people got used to different habits and ways of working during the Covid-19 pandemic, which prompted them to reflect on their careers'. If accurate, psychological theories could explain why these reflections led some workers to conclude that early retirement is their best option.

Some psychological theories 

Drawing from role theory and role identity theory, retirement can be conceptualised as a process of adopting or adapting new or existing roles in the years preceding and following retirement (Wang et al.,2011; Bordia et al., 2020). This may have occurred at an accelerated rate over lockdown, with workers being able to rehearse new or revised roles while unable to work. For example, some people became active volunteers in their local communities. Workers may also have felt a reduced emotional burden from the work-family role conflicts noted by Cui at al. (2024) and Katarzyna and Grzegorz (2024).

A study based on self-determination theory (SDT) found that older people are more likely to work longer when their basic psychological needs are fulfilled: autonomy, competence, and relatedness (St-Onge & Beauchamp Legault, 2022). This research also found workers had a need for beneficence (a factor not included explicitly in SDT): the need to feel valuable and useful. Beneficence appears to overlap with concept such as 'meaning' in the PERMA model from Positive Psychology and 'life purpose' from Ryff's Psychological Wellbeing Scale. 

Although not suitable for all, home working has helped 'knowledge workers' meet their psychological needs (Boyraz & Gilbert 2024). As the Lords' report infers, as restrictions lifted some older workers may have seen early retirement as preferable to a return to less fulfilling working arrangements. More broadly, they could have reflected on how well their needs were satisfied in work, including how useful and valuable they felt, compared to non-work roles adopted during lockdown.

Research drawing from the Job Demands-Resources (JD-R) model indicates that work enjoyment and the ability to engage in job crafting influences employees' perceptions of when they will retire (Schreurs et al., 2011; Taneva & Peng, 2023). JD-R, SDT and role theory can be woven together. Workers may find that agreeing how they will approach their work (e.g. their specific tasks or targets, methods of work, where or when they work and so on, i.e. job crafting) will help them to manage demands, and meet their basic psychological needs. This process can help them to find greater enjoyment, value and meaning in the various roles they occupy in work, and reduce conflict with the roles they occupy outside work.

Shaping work

Earlier, the inference was that older workers are pushed into early retirement due to feelings of vulnerability, excessive demands, and ill health. The few psychological models I've discussed (and there are many others to draw on) illustrate how, potentially with support from our profession, work can be shaped to continue to motivate and satisfy older workers, extending their working lives. If organisations do not effectively address these 'push and pull' factors, the evidence suggests that another shock to our country or economy could lead many financially independent older adults to seek security and satisfaction in retirement.

And me? Covid-19 presented me with opportunities to reconnect with friends and revive much-loved but long-shelved hobbies and interests. Voluntary contributions, such as speaking at conferences, lecturing for Universities and so on, allow me to step back into roles that were valued parts of my identity for two decades. I might broadly label these roles as 'professional' or 'trainer'. 

I could have continued working. I did not want to return to delivering services face-to-face, as many clients were requesting, not least because of how demanding I found it to deliver in-person services with my hearing loss. I might have engaged in job crafting to extend my career such as offering an online-only service. However, I was drained after years of 'total availability', anxiety over technology and tax returns, and the need to manage a changing and complex legal landscape in the wake of the Grenfell tragedy. It slowly dawned on me that, with reasonable restraint, I could afford a satisfying retirement.  

There have been challenges as I negotiated my post-retirement domestic roles, and I sometimes feel inspired to return to paid work. Not yet, though.   

Dr Nick Bell CPsychol CFIOSH

Honorary Principal Lecturer, Cardiff Metropolitan University

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