Not retiring: Budget analysis

What will the Budget measures mean for older workers?

Retirement age couple smiling and looking at a laptop


This week’s Budget had a number of measures for older workers in a bid to get more older workers to stay in or return to work. Despite conflicting reports over the last few months it is generally agreed that much of the problem with over 50s dropping out of the workplace is a result of long-term health issues. The pandemic forced policymakers to focus on this, but it is an issue that has been rumbling for some years and the crisis in the NHS, lengthening waiting times, is making it worse. That’s not to mention the mental health impact of labour shortages across the workforce and the cost of living crisis. Mental health accounts for a large percentage of long-term health issues.

The Budget sought to address some of these issues through a new voluntary employment scheme for disabled people and those with health conditions in England and Wales called Universal Support. The government will spend up to £4,000 per person to find them a suitable role and cater to their needs, which it says will support 50,000 people per year once  the programme is fully rolled out. It also announced over £400 million to be spent on services for mental health, musculoskeletal conditions and cardiovascular disease, the major health-related causes of people leaving the workforce, through ‘WorkWell Partnerships’. All of this is helpful, although we wait to see the detail. The fact that Universal Support is voluntary has also been welcomed.

There was also a pledge on disability benefits reform, including the removal of the controversial work capability assessment and support for claimants to get back to work without fear of losing benefits.

Other announcements included the extension of the in-person midlife MOT pilot for jobseekers on Universal Credit. The midlife MOT offers older workers the time to consider their long-term plans, including financial wellbeing. Critics have said that targeting jobseekers will miss those who have become economically inactive or may be in danger of dropping out. There is an online tool for other older workers which is being enhanced, but face to face conversations are often more effective and only a number of employers currently offer them. Midlife MOTs – indeed regular pauses to take stock generally – need to be normalised within the workplace as people work longer and smaller companies will need support to implement them.

There was also talk in the Budget of more funding for an occupational health pilot scheme for SMEs. This is vital. SMEs are the main employers in the UK and many simply don’t have the resources for any kind of occupational health work. It is ironic that changes in the state pension age have coincided with disinvestment in occupational health.

The Budget also included a new ‘Returnerships’ apprenticeship targeted at the over 50s which will refine existing skills programmes “accelerated apprenticeships, Sector-Based Work Academy Programme placements and Skills Bootcamps” – to make them more accessible to older workers by making them more flexible and shorter to take account of their previous experience.

Again we await the details, for instance, whether you have to have dropped out of the workforce to qualify. Many older workers are stuck in manual jobs which they cannot continue with due to health or other issues and need support to transfer to more sedentary work or work that can be done more flexibly. They need help to transition to other roles, for instance, training, and they need the good quality flexible jobs to be available. The Chancellor spoke at the weekend about helping older workers back into work from home jobs. It’s ironic since members of his own party, Jacob Rees-Mogg in particular, have long denigrated working from home. Rees-Mogg famously put letters on civil servants’ desks after the pandemic to bully them back to work. The Government’s message on flexible working needs to be much more consistent and, if they are really committed to tackling the issues associated with an ageing workforce, they could look, for instance, to incentivise remote working more as happens in some parts of the world.

Much of the controversy about the Budget – at least when it comes to older workers – centres on the Chancellor’s pension tax plans: the abolition of the Lifetime Allowance charge and change to the Annual Allowance. The Chancellor said the aim was to retain NHS consultants, but the result is essentially a tax cut for the very richest – the only tax cut announced in the Budget, something Labour has pledged to reverse. Critics question whether it will indeed retain as many older workers and whether, at over one billion pounds, it can be justified. Meanwhile, for the lowest paid, part-time workers, the Chancellor announced a stricter benefits sanction regime and extended the number who would come under intensive job searching rules, with the possibility of sanctions if they don’t comply.

So the Budget seemed to be a mixed bag for older workers and we’ll wait to see the detail on many of the announcements. One of the key issues in terms of older workers who have dropped out and those who are likely to drop out in the future was not addressed, however. That is, why is the UK workforce so unhealthy? There are many reasons why, related to the quality of work, job insecurity and the threadbare health and social care sector in the UK. All of these are embedded problems which will take many years to fix, but there was no mention of, for instance, public sector pay, in the Budget – except to say that keeping inflation down is the Government’s main goal – although yesterday saw an offer to NHS workers. The Budget took place as workers around the country, from teachers to transport workers, took to the streets. Pay, public sector funding and labour shortages caused by stress and pay combined are at the heart of the strikes. Strong public services are essential for a healthy ageing workforce.

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