The Resolution Foundation has warned that older people who lost their jobs during the pandemic could receive worse support than younger people, leading to large numbers of over-50s falling out of the workforce for good.
In its report, A U-Shaped Crisis, supported by the Nuffield Foundation, the independent thinktank voiced concerns that Restart, the recently announced support scheme for the long-term unemployed, “carries the risk that older workers receive a lower quality of service than younger workers”.
“This appeared to happen under the Work Programme, which had a similar funding model, where sustained job outcomes were much lower for older participants,” the report states. “The government must monitor this closely.”
The report, published by the Foundation’s Intergenerational Centre, says there is also a case, given the earnings hit that many older workers experience on returning to work, for piloting and evaluating a tax credit supplement for older work returners, as existed under the New Deal 50-plus programme in the early 2000s.
The key reason for concern, the report says, is that scheme staff are incentivised via their pay to prioritise helping workers who are easier to find new jobs for; they tend to be younger people. A risk is thereby created that older workers, whom it is harder to find jobs for, will be neglected.
The report says this is evidenced by the Work Programme where older workers experienced less frequent meetings with advisers and less continuity of support when staff were incentivised via pay in the same way.
The concerns were echoed by the Centre for Ageing Better. “We know that in the past, back-to-work support hasn’t worked for over-50s. In the previous Work Programme, this age group had the worst outcomes of any group,” said Emily Andrews, senior evidence manager for the organisation.
“It’s crucial that in the wake of this crisis, those mistakes are not repeated, or we risk seeing large numbers of over-50s falling out of the workforce for good.
Caroline Abrahams, the charity director at Age UK, said it was particularly concerning that older women been so badly affected by the loss of their livelihoods as a result of the pandemic. “This group are most likely to have caring responsibilities so might find it more difficult to get alternative work,” she said.
According to the report, the Covid-19 crisis has caused the biggest annual employment fall for older workers since the 1980s, with older and younger workers affected far more than those in the middle of the age distribution.
While the youngest workers (16- to 24-year-olds) have experienced by far the largest fall in employment in the past year (3.9%), the report notes the fall in employment among workers aged 50 to 69 has been twice as big as those aged 25 to 49 (1.4% compared to 0.7%).
After losing work, older workers take the longest, on average, to return to employment.
Furthermore, when workers aged 50 and over return to work following a period of unemployment, they face the highest income hit of all age groups compared with their pre-unemployment earnings.
“Becoming unemployed during the pandemic can potentially have a big impact on older workers’ retirement plans, either forcing them to retire earlier than they would have planned to, thereby reducing their income in retirement, or forcing them to work longer to make up for lost earnings,” the report found.
A government spokesperson said: “Older workers are a huge asset to this country, and heading into the pandemic a record number of over-50s were in work.
“As we build back better, we’re helping hundreds of thousands of older workers to retrain, build new skills and get back into work through our Plan for Jobs and our 50 Plus: Choices offer.”