Closing employment gap for older workers would generate £9 billion a year for economy

The next government could boost the economy by as much as £9 billion a year by giving older workers an equal opportunity in the labour market, new analysis by the Centre for Ageing Better reveals. 

By closing the employment rate gap between older and younger workers, the Treasury would also net an additional £1.6 billion a year in income tax and national insurance contributions, the charity’s calculations detail. 

The Centre for Ageing Better is calling for all political parties to commit to raising the employment rate of 50-64 workers to 75% by 2030 by signing up to its new 50+ Employment Commitment. This would equate to around half a million more 50-64-year-olds in work.   

The commitment has been endorsed by other leading organisations including Demos, Age UK, the Institute for Employment Studies, Phoenix Insights and the Learning and Work Institute.   

Supporters of the commitment say older workers are currently being let down by ageism and age bias in the labour market, a lack of flexible working and health support, limited opportunities for skills development and underperforming employment support which is preventing many from realising their full potential.   

“The pandemic stalled two decades of improvement in the employment rate of older age groups and they have not recovered. If employment opportunities stagnate after 50, so too will the UK economy.   

“A 75% employment rate target is attainable based on pre-pandemic trends but will require a sustained government focus on the issue. By 2030, there will be an additional 1.2 million people aged 50-64 in the UK, but only another 500,000 people aged 15-29. The future of UK growth and productivity over the next Parliament depends on mobilising the 50+ workforce. 

“This is not about special treatment for older workers. This is about fairness and ensuring equal opportunity for older workers seeking employment or wanting to stay in work that will benefit employers, the economy and the whole country. 

“By the end of the next Parliament, the State Pension Age is set to rise to 67. It is imperative that we act now to reignite the pre-pandemic momentum and ensure that no segment of our workforce is left behind.” 

The 50+ Employment Commitment calls upon political parties to commit to: 

• Raising the performance of employment support for people aged 50-66 to the level of people in their 40s. 
• Increasing investment in employment support for people in their 50s and 60s, making targeted support available nationwide to all people out of work over 50.​ 
• Creating new opportunities for people to upskill, reskill and develop in their 50s and 60s – including through expanding mid-life review pilots.   
• Conducting a review of DWP’s employment and benefits approach to all people in their 60s before the State Pension Age increases to 67 from 2026. 
• Consulting on the introduction of paid carer’s leave and strengthen recent legislation on unpaid carer’s leave and a default right to flexible work from day one by the end of next Parliament. 
• Delivering a government-backed awareness and information campaign, directed at employers of all sizes, to champion the value of good work for people in their 50s and 60s.   

“Three quarters of all employment growth this century has been among people aged over 50 but in the last four years this has ground to a halt. For the first time in three decades, employment among older people has stopped growing.

"Addressing this needs to be a top priority for whoever wins this general election, as helping more older people into work and to stay in work is going to be key to supporting a stronger economy, better public finances and fewer people in poverty.   

“A 75% target looks ambitious from where we are now, but it is really the least that we should aim for. We’re currently around 20th in Europe for employment among older people, and around a dozen countries are already at 75% higher. We should be there too.” 

The 50+ Employment Commitment details the current imbalances in the labour market impacting older workers which include: 

• The current employment gap between those aged 25-49 and those aged 50-64 is 14 percentage points (85% vs 71%).   
• People in their 50s and 60s are nearly twice as likely as younger adults to become long-term unemployed once out of work. 
• Just one in ten people aged 50-64 who are out of work engage in back-to-work support and, when they do, their outcomes are significantly worse than the all-age average. 
• Almost one in three workers aged 50-70 who left their position during the pandemic report experiencing age discrimination when looking for work. 
• Over half a million people aged 50-65 in this country who would like to be in work but are not.  

“Never before has Britain needed its older workers as it does now. With all the years or experience, knowledge, and wisdom that the 50+ age group can bring, it’s of huge importance that everyone who wants to work is able to do so.   

“However, for many people it’s not always that easy. Older workers face many barriers, particularly if they are carers, have a health condition, or have recently found themselves unemployed and looking to retrain. And this is not to mention the ageism that pervades the labour market and prevents many in this age group from fulfilling their potential.   

“It’s crucial that the next government looks urgently at how to facilitate more – and better – working in later life, in terms of both enabling people to stay with their existing employer, and to find alternative work if the need arises. 

“Without a focused effort that looks explicitly at the barriers faced by older workers, we risk failing to take full advantage of this enormous talent pool, which would be a real tragedy at an individual and a national level.”