For first time there are now more than 1 million workers in UK aged over 65

The number of workers in Britain aged over 65 has risen above 1 million for the first time as firms increasingly prefer older employees to younger staff.

Latest jobless figures from the Office for National Statistics highlighted the "greying" of the workplace amid signs that growth in early 2013 is starting to have an effect on jobs.

Data released on Wednesday shows that unemployment fell by 5,000 to 2.51 million in the three months ending in April.

Employment rose by 24,000 during the quarter, beating the City's expectations of a small fall in the number of people in work. The ONS said there were now 29.76 million people in employment, up 432,000 on a year ago.

Of these, 1,030,000 were over 65, up by 38,000 on the quarter and by 96,000 on the February-to-April period of 2012.

Younger people had a tougher time breaking into the jobs market. The number of 16-24-year-olds in employment fell by 4,000 to 3.68 million in the three months to April.

Jim Hillage, director of research at the Institute for Employment Studies, said the rise in employment for the over-65s was significant. "While this reflects a welcome willingness among employers to recruit and retain experienced people, it may also reflect the need that some older people have to top up inadequate pension arrangements."

Jobs continue to be shed from the public sector, with employment down by 22,000 in the latest period for which figures are available, the three months to March 2013. But an expanding private sector created 46,000 additional jobs in the same period.

The ONS said the UK's jobless rate remained unchanged between the latest quarters at 7.8%, but that it was down 0.4 points on the previous year. The government's alternative measure of unemployment – the number of people claiming Jobseeker's Allowance – fell by 8,600 to 1.51 million in May, the ONS said.

Higher bonus payments led to an increase in the rate of growth of average earnings. Although still running below the current 2.7% inflation rate, earnings were 1.3% higher between February and April than a year earlier. That compared with a 0.6% increase in the three months ending in March.

The official data came in the wake of a report from the Institute for Fiscal Studies showing a 6% drop in real wages since the start of the recession – the biggest five-year drop since modern records began.

The jobs figures added to City speculation that the economy will grow by around 0.5-0.6% in the second quarter of 2013, following 0.3% expansion in the first three months of the year.

Mark Hoban, employment minister, said: "It's a credit to the growth of British businesses up and down the country that we now have a record number of people employed in the private sector.

"With the number of people in work increasing, and unemployment down, these are welcome figures. The fact that youth unemployment is also down is a positive sign. But we are not complacent. Through schemes like the Work Programme and the Youth Contract we will continue to help people find the jobs they need so they can realise their aspiration of looking after themselves and their families and help the country compete in the global race."

Ian Brinkley, director of the Work Foundation, said: "The labour market figures released this morning give a mixed picture. Overall, employment is still holding up, especially in the private sector. But long term unemployment is still rising. Nearly 900,000 people have been out of work for more than a year, and nearly 460,000 out of work for more than two years.

"The coalition needs to set out clearly in this month's spending review how it intends to reverse this trend, which is damaging the job prospects of individuals and our long-term economic success."

1. UK unemployment falls

Jobless total in the three months to April dips to 2.51 million, while number of people in work rises 24,000 in the same period

Unemployment in Britain fell by 5,000 in the three months to April as the economy's return to growth created more jobs.

Figures released by the Office for National Statistics showed that the jobless total using the internationally-agreed yardstick dipped to 2.51 million.

Employment rose by 24,000 during the quarter, beating City expectations of a small fall in the number of people in work. The ONS said there were now 29.76 million people in employment, up 432,000 on a year ago.

Jobs continue to be shed in the public sector, with employment down by 22,000 in the latest three months for which data is available, the three months to March 2013. But an expanding private sector created 46,000 additional jobs in the same period.

The ONS said the UK's jobless rate remained unchanged between the latest quarters at 7.8% but that it was down 0.4 points on a year earlier.

The government's alternative measure of unemployment – the number of people claiming jobseeker's allowance – fell by 8,600 to 1.51 million in May, the ONS said.

Higher bonus payments led to an increase in the rate of growth of average earnings. Although still running below the current 2.7% inflation rate, earnings were 1.3% higher between February and April than a year earlier. That compared with a 0.6% increase in the three months ending in March.

James Knightley, economist at ING, described the data as "encouraging", adding that "when coupled with recent better business survey figures and rising consumer and business confidence suggests we should be looking for a positive GDP figure in the region of 0.4 to 0.5% quarter-on-quarter for the second quarter of 2013."

Vicky Redwood, UK analyst at Capital Economics said: "The latest data bring slightly better news on the labour market, although it is still looking rather weaker than a few months ago. After falling earlier this year, employment managed to rise by 24,000 in the three months to April. A rise in private sector employment offset a fall in the public sector jobcount."

Seperate figures released by the Institute for Fiscal Studies showed that British workers have suffered unprecedented pay cuts of 6% in real terms since the financial crisis began five years ago. Paul Johnson, director of the IFS, said household incomes and spending had fallen deeper and stay lower longer than in any previous downturn since the Great Depression.