The Treasury is said to be considering proposals to give tax breaks to over-50s who return to the workplace, in order to encourage them out of retirement.

In a bid to cut the number of inactive middle-aged Britons, Senior Ministers are apparently contemplating granting a year-long income tax break to those who return to work after a career break.

According to government figures, around nine million people in the UK are now “economically inactive”, with a report finding that a wave of people taking early retirement during the pandemic was likely the cause of the increase of 565,000 inactive Britons since the start of covid.

The idea is a part of a number of plans being considered, which also includes allowing those claiming disability benefits to have them removed gradually, in a bid to avoid 'incentivising' people to stay off work.

It is believed that Work and Pensions Secretary Mel Stride has been assessing the benefits system, as disability claims are up 70% since the pandemic - with estimates that the annual cost will rise to £8.2billion by 2027. 

A shake-up of the system could include reforming what has been described as the “perverse” fit-for-work tests, in which people have to prove they are unable to work, rather than focusing on what they are able to do.

Prime Minister Rishi Sunak has pledged to boost economic growth but is thought to be anxious that this could be stunted if they cannot encourage people back to work and ease the labour shortages.

Last week a spokesperson for No 10 said that the Prime Minister had made it clear that “there were a range of things we are looking at, but obviously it is for the Budget to talk about these kinds of things”.