New employment support programme needed to tackle older workers crisis, MPs told

A new national programme of employment support is needed to tackle the economic inactivity crisis among older workers, our employment expert told a committee of MPs this morning.

Luke Price, Senior Research and Policy Manager (Work), told the Work and Pensions Committee that a more tailored approach to employment support was needed if more older workers were to return to fill labour and skills shortages. He added that greater outcomes could be delivered if employment support was offered away from the Jobcentre as many older workers did not wish to engage with the service or claim Universal Credit in order to meet the eligibility criteria.

He told MPs that previous Department for Work and Pensions (DWP) programmes had been ineffective with some finding work for only around one in eight older workers. The Prime Minister has recently indicated that tackling the economic inactivity crisis will be among his top priorities for the year ahead.

It is anticipated that the government will bring forward a number of recommendations to tackle the issue in the Spring Budget in March following a review of economic inactivity by Work and Pensions Secretary, Mel Stride MP. Luke Price also recommended two immediate steps the government could take to help deliver improvements to the economic inactivity of older workers indicating funds that were already available to tackle the problem.

The committee was told the government could reinvest a proportion of the £2 billion Plan for Jobs into tackling older workers’ economic inactivity by extending the programme’s eligibility to people over 50 who have been out of work for over a year. Luke Price also recommended bringing forward by a year the People and Skills element of the Shared Prosperity Fund to 2023/24 to help deliver place-based and responsive support.

He said: “In the longer term what we really need is a national programme of employment support specifically aimed at those aged 50 plus. We’ve done a lot of work with the Greater Manchester Combined Authority and also with Department of Work and Pensions to develop a pilot and an idea for what that would look like for Greater Manchester.

“It is a new approach specifically aimed at those aged over 50 which theoretically you could do in other parts of the country and which could complement the PM’s recent announcement about Mid-life MOTs.”

Luke Price also told the committee that the pandemic had a disproportionately detrimental impact on older workers and there were significant concerns about how many might cope in the current cost-of-living crisis. The committee was told that the disruption of the pandemic meant many older workers left employment unexpectedly with two out of three workers aged between 50 and 70 leaving work earlier than they had expected with 50+ workers making up a third of redundancies during this period. Older workers then faced a bigger challenge to get back into employment with younger workers made redundant during the pandemic twice as likely to be back in work within six months than 50+ workers.

He said that the older workers who left work during the pandemic and were now economically inactive were proportionately more likely to be on NHS waiting list than those that have returned to work. Around two in five older workers who left work during the pandemic and have not returned have debt of some kind, such as mortgage debt or credit card debt, and so are likely to have financial obligations which would be difficult to meet without getting back into work.

He added: “There’s a consistent body of research that suggests that people at any age underestimate how much they need to save for a pension, to support themselves. So it is likely that some people who think they will be financially fine, and might not be, and particularly when you combine that with the cost-of-living crisis, that is likely to have worsened.”