The workforce is getting older, and this trend is set to escalate. We review what the demographic shift looks like, how this could impact the risk profile of a business and what firms can do to mitigate this problem.

Changing shape of the world’s population and workforce

The number of countries experiencing population decline is increasing. Since 2010, 27 countries or areas have experienced a drop and between now and 2050, the United Nations expects this to expand to 55 countries, and almost half will experience a drop of at least 10%1.

In the UK, 2022 saw the lowest birth rate in two decades, according to the latest figures released by the Office of National Statistics. At 1.49, the total birth rate across different age groups fell below the 2.1 rate needed to maintain a steady population without relying on immigration2.

A shrinking “young” population will reduce the workforce in the traditional sense and could give cause for economic concern if there are not enough workers available. Yet one demographic sector is bucking the trend and could provide the solution for businesses as by 2050, the world’s population of over 60s is expected to have doubled to 2.1 billion3.

Employing older workers is not an overnight phenomenon; the UK employment rate for adults aged 65 or older has been steadily rising since 19924. Ten years ago in 2013, the employment rate for 65-year-olds was 27.7% - this figure rose to 29.5% in 2018 and further increased to 42.0% in the last year5. This will in part likely be driven by the increasing state pension age.

As a result there are almost one million more workers aged 65 and above in the UK labour market than there were in 2000 and now, one in nine are working past 65, compared to one in 20 at the turn of the century6; a significant change in a relatively short period of time.

How can employers bring this group of workers with them?

There is growing evidence that workers, that may have traditionally retired, are opting for “returnships” or flexible arrangements. With labour shortages making recruitment expensive, companies are offering these workers shorter hours and schedules to accommodate a better work-life balance, along with hybrid working opportunities that wouldn’t have been possible pre-pandemic7.

Enjoyable work in a happy team can also encourage workers to consider working for longer. Therefore, there will be a greater need to invest in the health and well-being of the current workforce to ensure they can work for longer. They will need to be reskilled throughout their working life, and their career trajectory may include regular sabbaticals. The older workforce holds a wealth of experience, and time and consideration should be spent on how best to share this with younger colleagues, especially in a hybrid working environment.

How will an older workforce change the risks faced by UK firms?

From a risk management and insurance perspective, an older workforce presents two key increased risks for employers; a greater risk of employer liability claims related to duty of care and a higher possibility of age discrimination claims, as firms navigate the changing demographics of their workforce. Both of these can be mitigated by purchasing employment practice liability insurance.

The duty of care an employer has for its employees will increase if a proportion of the organisation's employees are over 65. What that means in practice will very much depend on the specific nature of the business and the expectations that are placed upon employees.

Gallagher is advising clients that risk assessments will need to be broader in scope to consider different vulnerabilities. While a separate risk assessment for older workers is not necessary, the UK Health & Safety Executive suggests several changes employees may want to make, including allowing older workers more time to absorb health and safety information or training; introducing opportunities for older workers to choose other types of work and designing manual handling tasks to eliminate or minimise the risk8. Employers will need to make adaptations to the workplace to ensure safety for employees of all ages. If employers do not ensure they have an adequate understanding of their risk by appropriate risk assessments, then they will expose themselves to increased regulatory and civil litigation.

An employer’s scope of liability will also evolve – for example, if an employee working in a noisy environment makes a claim for noise-induced hearing loss, the employer would need to have sufficient evidence to challenge this and make a case that the hearing loss was age-related and was not a direct result of the employee’s work.

In addition, making an effort to understand and support your employees’ physical and mental well-being is important irrespective of age, but with a wider age range in employment, this becomes even more essential.

Tech support

Technology could be used to offset risk and is already used in construction to improve health and safety. Smart helmets are standard hard hats connected to the business’ control centre. They can monitor heart rate, location, oxygen saturation levels, skin temperature and even fatigue. Exoskeletons are lightweight machines that construction workers wear to support them in undertaking strenuous and repetitive tasks. They can increase productivity and reduce risk, enabling workers to carry out tasks without placing excessive strain on their bodies.

There is clear potential for this kind of pre-emptive technology to be rolled out more widely across industries to avoid potential injury claims and/or reduce severity.

Wearable technology could be instrumental in manufacturing and logistics warehouses, where the risk of repetitive strain is high, and in retail, where subsectors such as supermarkets and home improvement stores require regular heavy lifting in the stock room and delivery of goods.

Increased risk of age discrimination claims

If a 75-year-old wants to remain in a client-facing role and is responsible for selling products and services to individuals who are much younger, there is potential for cultural disconnect. An employer may feel they risk losing business if they do not move a younger person into that role, yet, they would need to handle the situation sensitively as it could expose the business to a discrimination claim. Therefore, any necessary change must be negotiated carefully.

An older workforce could be an increasingly influential factor within future M&A transactions. Legally, the Transfer of Undertakings and Protection of Employment (TUPE) legislation requires that, on take-over or transfer of employees to a new employer, they must be transferred on the same or better employment terms and conditions unless they agree otherwise. If the buyer tried to move older employees out of senior positions, they could be sued for age discrimination.

SMEs may be more vulnerable to claims relating to discrimination; large corporates tend to have in-house HR teams which can ensure decisions and actions do not expose the company to potential claims. However, smaller firms potentially would not have this luxury.

Amongst Gallagher’s client base, global businesses are most likely to buy employee liability practice insurance in isolation, but for many UK companies, it is purchased as a subsection of their management liability insurance. Many businesses however are unaware that their standard, and compulsory, employee liability insurance would not cover these kinds of claims and are therefore without cover in place. Businesses should also ensure they have clear health and safety policies in place, with management buy-in to ensure adherence.

For firms employing an older workforce, Gallagher is advising businesses to ensure any risk assessments they carry out reflect the changing demographic of the workforce, to review the limits of the employers’ liability cover they have purchased and to check they have employee practice liability cover. All this should be done with the support of an experienced insurance broker which can advise on what is suitable in terms of insurance cover.


1. 9.7 billion on Earth by 2050, but growth rate slowing, says new UN population report, United Nations, accessed 23rd February 2024

2. Births in England and Wales: 2022(refreshed populations), Office for National Statistics, 23 February 2024

3. Ageing and health, The World Health Organization, 1 October 2022

4. Employment rate 65+ People: %, The Office of National Statistics, 13 February 2024

5. Economic labour market status of individuals aged 50 and over, trends over time: September 2023, GOV.UK, 24 October 2023

6. Almost one million more workers aged 65 and above since the millennium, new analysis reveals, Centre For Ageing Better, 30 Oct 2023

7. If you’re too old for an internship, try a returnship instead, Business Times, 26 June 2022

8. Older workers: Health & Safety, Health and Safety Executive, accessed 21 March 2024