Call for more support for older workers

The Covid crisis has had a substantial impact on older-age employment, older people face a harder struggle getting back to work and, once back, typically take a fall in earnings, according to a new report.

The report by the Resolution Foundation finds that employment for over 50s has been rising since the 1990s, in large part driven by rising employment for older women, including changes in the retirement age for older women.

Employment stood at 73% pre-Covid, but between 2019 and the end of 2020, the employment rate among those age 50 to 69 fell by 1.4 percentage points, compared to a 0.7 percentage point fall among those age 25 to 49.

Long-term analysis shows that, during the period 1998 to 2020, after becoming unemployed, 62 per cent of those aged 50 and above have returned to work within six months, compared to 74 per cent among those aged 16 to 29 and 72 per cent among those aged 30 to 49.

Moreover, over the past 20 years, workers over the age of 50 who become unemployed have faced hourly earnings that are, on average, 9.5 per cent lower than their earnings in their previous jobs. Weekly earnings are down by 17% due to the fact that many return on reduced hours.

The report also highlighted concerns that the Government’s new Restart scheme for the long-term unemployed could lead to older workers receiving a lower quality of service than younger workers if staff running the scheme are incentivised to get people into work, meaning they focus on younger people who are easier to find new jobs for. It cites research showing this is what happened with the Work Programme.

‘An ageist labour market’

At a webinar to launch the report Nye Cominetti from the Resolution Foundation said the fall in employment for over 50s over the last year was similar for that faced by men in the first year of the 1980s and 1990s crises, but worse for women than in any other previous crisis in the last 40 years. Cominetti said he hoped that the Covid impact would be short-lived, but he added that there was still a risk that it could get worse as we await the impact of the end of the furough scheme.

The biggest factor at play in how badly older workers have been affected is the sector in which they work and, to some extent, the kind of contract they are on. Cominetti made several short-term and longer-term recommendations. In the short term, he called for high quality employment support for older workers and improved incentives for returners such as tax credit supplements; in the longer term, he said more flexible working, a right to return after a period of ill health or caring and more training for older workers are needed.

Baroness Ros Altmann, a leading expert on later life issues,  said there was a significant risk that older workers who lost their jobs might give up soon soon and never come back to the workplace which would have a long-term impact on the economy and on their pensions. “There is a risk that we will have more poorer pensions if we fail to convince older people that they have a useful and productive role to play in the coming years,” she said.

She highlighted the need for lifelong learning and tailored skills training and said we should not make the same mistakes of past crises and encourage early retirement in the belief it helps the young. Research shows, she said, that retaining people in the jobs market creates more jobs for younger people. She added that women are more reliant on the state pension and so the risk to them is higher – policymakers need to ensure they are not overlooked. Schemes like the New Deal 50+ programme of the 2000s which specifically targeted older people who had lost their jobs are vital, she said.

Kim Chaplain from the Centre for Ageing Better said that we should not pit one generation against another, given evidence shows a multigenerational workforce is best for all and for the economy. She called on policymakers to highlight the benefits of employing older workers and for employers to think more about the multigenerational workforce. “The labour market is fundamentally ageist,” she said, adding that employers are not doing enough to address this. She said statistics showed older workers don’t tend to move around in their jobs as much as younger ones which is in part because, for young people, moving around is an opportunity to progress, whereas for older workers it is a risk due to ageism within the recruitment process.

She added that employment programmes “consistently let down” older workers not necessarily due to their content, but because of a lack of leadership about the benefits of hiring older workers and a lack of focus on tailored programmes, based on listening to what older workers need. She said the Department for Work and Pensions should set targets for protected groups in its employment programmes.

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