How does the Prime Minister plan to encourage more older workers out of early retirement?
Rishi Sunak has reportedly announced plans to use a revamped mid-life MOT scheme to encourage more older people out of early retirement and back into work.
Our Specialist Advisor for Work, Kim Chaplain reviews how the government may use this scheme to support older workers or people who’ve retired back into the workplace.
Increasingly the government has shown over the past year that it is coming to realise the scale of older workers leaving the labour market and raising the issue higher up its priority list.
We’ve had the Chancellor specifically reference DWP support for older workers during May’s cost-of-living support announcement, the DWP launch in the summer of the 50PLUS Champions dedicated to helping over 50s into work and the announcement in November’s Autumn Statement of a thorough review of workforce participation.
Now we have the biggest indication yet that encouraging more older people back into work is a key goal for this government with the announcement over the festive period that the Prime Minister was drawing up plans to woo thousands of “missing” older workers back into the office amidst fears that Britain’s economic recovery is being held back by people taking early retirement.
It has been reported that over 50s will be offered a new personal MoT that will allow them to assess their financial health and their prospects for early retirement. The assessment will also be used to help identify opportunities for part-time or flexible work, mentoring and skills training. The project will also include a nationwide public information campaign to highlight the opportunities available to older workers.
For people like me who have been watching with concern the worrying post-pandemic trend of older workers leaving the labour market in their hundreds of thousands, this announcement was a real bonus Christmas present. It has been a long time coming, but at last we are seeing the specific issues associated with keeping older workers active in the labour market being given real consideration, and some interesting solutions emerging.
We have known for a long time that many people who leave the labour market later in their careers do so for specific reasons. Many would like to return if work could be packaged differently or if they knew more about the jobs on offer. Unfortunately, the gateway to the support they need is currently largely via a benefit system and Jobcentreplus services that many do not want to engage with.
It is time to think about delivering services differently.
The proposed approach by the government is interesting because it differs from how Mid-life MOTs have previously been proposed. If anything, it is most similar to the Kickstart Scheme, which created 163,000 jobs through the pandemic by providing funding to employers to create jobs for 16- to 24-year-olds on Universal Credit. In this instance, the government appears to be designing a post-Covid programme for inactive 50 plus people using the principles and framework of the Mid-life MOT.
The reason why this could be a hugely significant step in tackling this issue is because the proposed scheme, based on what we know about it so far, appears to address some of the key barriers that we at the Centre for Ageing Better and other specialists in the field have been saying needed to be addressed before effective solutions could be found.
Importantly it appears the new scheme will open up eligibility to those who are not claiming benefit, will be specifically tailored to the needs of the 50 plus group, prioritises flexible work packages which we know is the most sought-after incentive for older workers to return to work, and appears to include messaging to employers as well as a campaign to the over 50s themselves.
The proposed scheme appears to address some of the key barriers that we at the Centre for Ageing Better and other specialists in the field have been saying needed to be addressed before effective solutions could be found.
As ever the language and the tone of the campaign will play a critical factor, as will the delivery arrangements themselves. The messaging should normalise the hiring of workers in their 60s, encourage age-friendly recruitment and flexible working, and promote the benefits of older workers as part of a multigenerational workforce. The campaign should be strategically focussed towards solving the challenge that the non-participation of older workers within the labour market is holding the economy back.
If the government is now fully convinced of the huge value that older workers bring to employers and the economy more broadly, then that must be reflected in the real effort and imagination that will be required to persuade these workers to return to the workplace. People will not be persuaded through a rebadging of existing arrangements. To rise to the scale of this challenge, the government will need to provide creative and dynamic solutions. Some of those solutions will need to address workplace ageism itself, which will require the government to take a lead but is also an ambition we all have a part to play in making that difference.
The mid-life MOT is a suitably ambitious scheme for an issue that requires big thinking. But it will take time to bear fruit and in the meantime the problem could grow amidst a recession. But there are also three supplementary short-term actions that the government could take to tackle economic inactivity and help get older workers back to work more immediately.
The recommendations have been drawn up by a 50+ Employment Taskforce convened by the Centre for Ageing Better since the start of the pandemic to focus on the challenges faced by people aged 50 to 70 who are in employment or looking to return to employment.
The taskforce would welcome the government reinvesting a proportion of the £2 billion Plan for Jobs underspend, originally intended for an pandemic-sparked unemployment crisis that never came, by extending eligibility, and actively marketing, to people over 50 who have been out of work for over a year regardless of benefit entitlement.
The government should also bring forward the People and Skills element of the Shared Prosperity Fund to 23/24. UK Shared Prosperity Funding is well-placed to deliver the support needed to engage economically inactive older workers in job seeking that we know will be most effective for this cohort: place-based and responsive, delivered by organisations that are embedded in their communities and closely linked to the local labour market.
Finally, the government should monitor and publish economic participation rates and types among 50-65s, in the same way it does for young people not in education, employment or training (NEET). While the ONS has responded to the 50+ participation crisis with one-off data releases, we also need an ongoing framework of scrutiny for older worker participation with data monitored at a local and national level like with NEETs figures.
Combining these actions, both big and small, may just help the government solve their older worker crisis.