On 3 March 2022, the House of Lords is due to debate the following question for short debate:
Baroness Altmann (Conservative) to ask Her Majesty’s Government what steps they are taking to ensure that older workers can secure new opportunities in the jobs market.
Whilst there is no formal definition of an ‘older worker’, it is commonly used to refer to workers aged 50 years and over.
UK labour market figures released in February 2022 by the Office for National Statistics (ONS) show that UK job vacancies have risen to a record high. From November 2021 to January 2022 there were 1,298,400 job vacancies in the UK. This was an increase of 513,700 from pre-pandemic January to March 2020 levels.
The ONS figures also showed that economic inactivity for October to December 2021 had increased slightly on the previous three months, by 0.1 percentage points to 21.2%. The economic inactivity rate is the proportion of people aged between 16 and 64 years who are not in the labour force. This refers to people who do not meet the internationally accepted definition of unemployment because they have not been seeking work within the last four weeks and/or are unable to start work in the next two weeks. According to the ONS, several reasons including long-term sickness have contributed to the inactivity increase. The figures also showed that the economic inactivity rate was 1 percentage point higher than it was before the pandemic. Labour market economist for the Chartered Institute of Personnel and Development Jon Boys said that much of the inactivity increase was found within those aged 50 and over.
Additionally, Stephen Evans, the chief executive of thinktank the Learning and Work Institute, is reported in the Guardian to have said that there are 1.1 million fewer people in the UK workforce than there would have been had pre-pandemic trends continued. A key cause of this was older workers leaving the workforce, he said.
The same article reported that the Government’s Business Champion for Older Workers, Andy Briggs, said that whilst the Government has a “strong focus” on the issue, employers must also take responsibility for attracting and retaining older staff.
Why are older workers leaving the job market at a higher rate than before?
Official statistics have shown that the Covid-19 pandemic has affected older workers to a greater extent than those in the middle age groups. This has seen a reduction of older workers in employment.
In May 2021, the ONS published its findings on the impact of the pandemic on older workers. It noted the impact would vary depending on the different characteristics of older workers, including what industry they were employed in. Findings included:
- The employment rate for those aged 50 to 64 fell from 72.6% in the period December 2019 to February 2020 to 71.1% in the same period the following year, and from 11.5% to 10.4% for those aged 65 years and over.
- In December 2020 to February 2021, older workers were more likely to be long-term unemployed (for 12 months or more) than younger age groups.
- Of the 4.7 million furloughed employments at February 2021, 27.9% (1.3 million) were workers aged 50 years and over.
- 1 in 8 (13%) of older workers said they had changed their retirement plans as a result of the pandemic. Of these, 5% said they would retire earlier and 8% planned to retire later.
Following the ONS publication, UK thinktank the International Longevity Centre (ILC) warned that age discrimination would mean older workers unemployed as a result of the pandemic were more likely to have difficulties finding alternative employment then other age groups. The ILC warned that without additional government support, a large proportion of older workers could be required to retire early. It also called for more government investment to ensure that ill-health and caring responsibilities would not make it more difficult for older people to re-enter employment.
What has the Government done to support older workers?
The Government has introduced several measures aimed at supporting UK workers, including those aged 50 and over.
For example, the ‘plan for jobs’ is a programme that the Government launched in October 2020 that aims to help people across the UK whose employment has been directly impacted by the pandemic. The plan includes several programmes and financial incentives for employers considering hiring employees, offering work experience and upskilling existing staff. One of these programmes is the ‘restart scheme’.
The Government announced the restart scheme at the spending review on 25 November 2020. The restart scheme gives certain universal credit claimants who have been out of work for at least nine months enhanced support to find jobs in their local area. The scheme—commissioned by the Department for Work and Pensions—is open to adults of all ages and is being delivered across certain areas in England and Wales.
However, concerns about the scheme’s impact on older workers were raised by independent thinktank the Resolution Foundation. In its April 2021 report, ‘A U-shaped Crisis: The Impact of the Covid-19 Crisis on Older Workers’, it said there was a risk that older workers could receive a lower quality of support under the scheme than younger workers. It said this risk stemmed from the overall design of the scheme, likening it to an earlier scheme launched by the then Coalition Government in 2011, the ‘work programme’, which had a similar funding model. It argued that the funding model could give providers “an incentive to put less effort into those participants, such as older workers, who have a lower probability of finding work”. According to the report, under the work programme—which ran from 2011 to 2017—participants in their 60s were a third as likely to experience a successful job outcome than the youngest participants. The Resolution Foundation said that given this the Government should monitor this effect closely as part of the restart programme.
More recently, the Government announced a £500m expansion to its plan for jobs in October 2021. The expansion includes a new enhanced support package aimed at workers over the age of 50 to help them stay in and return to work. Funded by the Department for Work and Pensions, the Government said the expansion would:
- ensure workers leaving the furlough scheme and unemployed people aged 50 years and over receive more intensive support to get into work; and
- ensure older workers will receive better information and guidance on later life planning, helping them make more informed choices and support them to plan their career and remain in work.
In December 2021, the Government updated its guidance on help and support for older workers. This provides advice on employing older workers and working past the age of 50. In the guidance, the Government confirmed it had changed the name of the ‘fuller working lives’ agenda to ‘50 plus: choices’. Launched in February 2017, the fuller working lives strategy aimed to increase the retention, retraining and recruitment of older workers. Its principles were based on the report ‘A New Vision for Older Workers: Retain, Retrain and Recruit’, by the then Business Champion for Older Workers, Ros Altmann (now Baroness Altmann). The guidance said the name change signals the Government’s recognition of the different situations, transitions and challenges faced by the over 50s in the labour market:
It is hoped and intended that the new name strikes a note of optimism and positivity amongst our cohort—that over 50s workers do indeed have choices linked to staying in or returning back to work and that Government is keen to work with stakeholders and employers to help them make the best use of their skills and experience, whilst also building their future financial resilience.
In a letter from Mims Davies, Parliamentary Under Secretary for the Department for Work and Pensions, to John Spellar (Labour MP for Warley) on 19 January 2022, the minister referred to other actions the Government is taking to support older workers, alongside the £500m expansion. This includes plans to issue new funding to the ‘50 plus champions’. 50 plus champions refer to individuals located in 37 Jobcentre districts who focus on opportunities for older workers, helping them to find and stay in work.
To ensure that older workers can obtain new qualifications, the minister said the Government had launched several programmes aimed at upskilling and re-skilling adults. The programmes include the Lifetime Skills Guarantee, the National Skills Fund, and Skills Bootcamps which offer free qualifications and courses to adults. The minister also said that from 2025, the Government plans to introduce a lifelong loan entitlement to allow individuals to retrain and upskill as needed in response to changing skills needs and employment patterns.
In the letter, the minister emphasised the Government’s commitment to championing and supporting older workers, and to “ensuring that employers are aware of the wealth of skills and experience that they bring to the workplace”.
- Institute for Fiscal Studies (IFS), ‘Financial consequences of the coronavirus pandemic for older people’, 30 September 2020
- House of Commons Library, ‘Will more economic inactivity be a legacy of the pandemic?’, 16 February 2022