This morning’s Labour Market stats highlight the urgent need for action from the Chancellor in the upcoming Autumn Budget to close the employment rate age gap. Data released by the ONS this morning shows that while the employment rate age gap has reduced marginally, employment rates for 50-64-year-olds are still 13 percentage points lower than for 35-49-year-olds. The employment rate for the 50-64 age group now stands at 71.7% – which remains below the pre-pandemic figure of 72.8%.
The data also shows that 30.1% of those unemployed in the over 50 age group have been actively looking for a job for over 12 months which is the highest rate for any age group. The Centre for Ageing Better is calling on Chancellor Rachel Reeves to use just a tiny fraction of the savings from the recent state pension age increase to provide support for people in their 50s and 60s to stay in or engage with work. Allocating a very small proportion of the billions in savings from the pension age increase could fund tens of thousands of places on employment support programmes for older people.
Andrea Barry, Deputy Director for Work, Retirement and Transitions at the Centre for Ageing Better, said:
“The latest Labour Market stats are another reminder of the underperforming employment rates of 50+ workers in this country with job prospects that lag behind other age groups; that lag behind the pre-pandemic performance of this age group and which lag behind the employment rates of their peers in other countries.
“While other age groups have seen their employment rates restored to pre-pandemic levels, and then exceed them, for the 50-64 age group finding employment remains a tougher prospect than before the shock of the pandemic. The government needs to step in and work towards restoring the growth levels of 50+ employment we saw earlier in this century when it drove economic growth in this country.
“If the government wishes to even get close to its ambitions for an 80% employment rate, then the two age groups with the capacity for the biggest gains are among the under 25 and the 50+ demographics. The government has shown they are taking the issue of economic inactivity and unemployment among young people very seriously with the Youth Guarantee and the newly announced independent investigation into youth inactivity. They need to show the same level of priority and intervention to the 50+ age group too.
“Increasing the state pension age can cause significant financial harm to those waiting to reach eligibility. Increasing the state pension age to 66 caused the income poverty rate of people aged 65 to more than double. To avoid that happening again, we need to ensure more people are still working up to and beyond state pension age.
“Ahead of the budget, we are calling on the government to seize this opportunity and use a very small amount of the fiscal savings from the delay in paying out the state pension by a year, to better help support older workers to extend their working lives where possible and necessary.”
