The Office for National Statistics found there were a total of 1.56 million retired people under 65 during the three months between September and November, up 39,000 on the previous quarter.
Campaigners and charities explained the rise, saying older people found themselves “first in line” when companies made redundancies during the economic downturn as they are often on higher salaries than younger employees.
They blamed it on age discrimination and warned Britain risked facing a “lost generation” of older workers.
Rob Tolan, of the grant-giving charity Elizabeth Finn Care, said: “In past recessions, skilled veteran employees were largely spared the pain of redundancy, but this downturn is different.
“Statistically, for higher skilled, middle-aged workers, the prospect of returning to work or being offered training, is less likely than for younger generations. Frustrated and lacking in confidence, many have decided to desist from job searches altogether. While this might be appealing in the short-term, increased longevity combined with poor retirement provisions, means that many middle-aged people, who have hitherto been comfortable, may find themselves struggling in old age.
“Policy-makers need to do more to improve on the current provisions for helping older people back to work and a number of employers will need reminding of the benefits of taking on older and therefore more experience staff if we are to prevent another lost generation.”
Experts said the rise conflicts with Government policy which is aimed at encouraging people to work later on in life.
This includes the abolition of the default retirement age in April, which allows companies to force workers to retire at 65. The Government is also increasing the state pension age to 65 by 2018 for women and from 65 to 66 by 2020 for both men and women.
Neil Duncan-Jordan, a spokesman for the pensioners campaign group, the National Pensioners Convention said: “The over 50s are first in line when redundancies are made and then they find it difficult to get back into work because of their age. The Government still has not realized with this and is still pressing on with making people working longer.
“The state pension age is being pushed ever closer to 70 while those in their 50s are being made unemployed. Government policy just does not add.”
He added: “The nature of our workforce tends to be older in certain professions, particularly in the public sector. At a time when the public sector is facing cuts, they will inevitably make up a larger proportion of those that lose their jobs.”
Experts warned that many people under 65 who struggle to find work after being made redundant will see a dramatic shortfall in their income and may be forced into claiming Job Seekers Allowance.
Ros Altmann, director general of the Saga Group, said: “The jobs market is not working for older people. They are still facing huge age discrimination and by forcing them to wait longer for the state pension, they may be consigning them to unemployment benefit unless the attitude of employers changes.
“There is a bias against taking on older workers. People have been brought up to believe that older workers are not as good as younger staff, but evidence suggests younger workers move around more frequently. Older workers bring a better balance to the workplace.”
She warned: “Making older people sacrificial lambs to make way for younger people seems a very dangerous way forward.”
Article from The Telegraph