older workers – The NEN – North Edinburgh News

Over 50s to be hardest hit by the cost-of-living crisis and the financial impact of the Covid pandemic

A report by leading UK data scientists has revealed that the over-50s are being hit hardest by the current financial crisis and could face a lifetime of financial insecurity.

That’s according to new research from the University of Edinburgh’s Smart Data Foundry, supported and funded by abrdn Financial Fairness Trust.

According to the report, economic inactivity rates have risen a third amongst the over 50s since 2019, and people aged 50-54 face double the financial vulnerability risk than those aged 70-74.

Findings reveal that people in their 50s and 60s are facing the ‘perfect storm’ of circumstances including redundancy, ill health or caring commitments combined with a lack of savings and pension provisions.

To offset this loss of income, many people are being forced to withdraw lump sums from their pension pots to deal with pre-retirement income shocks.

And with the majority of pension pots worth under £30,000, this is causing knock-on issues with income tax and entitlement to benefits. Worryingly, the research also identified that those people who do cash in their pension pots early are 1.75 times more at risk of financial vulnerability in the future.

To tackle this, Smart Data Foundry is calling on the Department of Work and Pensions to act now to reduce the risk of pension assets being spent before retirement. It recommends an increase to the current capital limit of £16,000 for means tested benefits and, for those on Universal Credit, the reform of the Support for Mortgage Relief (SMI) loan facility by removing the zero earnings rule.

Chair of Smart Data Foundry, Dame Julia Unwin, explains: “We are seeing a pattern of people in their early to mid-fifties going from being in positions of comfortable, middle-aged breadwinners eyeing their future retirement over the horizon, to a generation suddenly finding themselves facing long-term financial hardship.

“A combination of being unable to secure viable work, confused messaging over pensions, little by way of state aid, and the savage cost-of-living rises resulting in many making decisions that could have long-term negative consequences.

“With this report and our key recommendations, we are calling for UK Government to intervene to protect and support the most vulnerable before it is too late. If they don’t act now, we will undoubtedly see even bigger problems in the years ahead. Data doesn’t lie; the evidence is there – older workers are at very real risk of financial vulnerability, but it is not yet too late to act.”

The research study also uncovered a widespread lack of understanding about the benefits system, confusion about claims processes, and hardship arising from payment frequency. To improve the transition to retirement, the report calls for increased government investment in the Pension Wise guidance service and expansion to include the state pension.

According to the findings, older workers are encountering barriers to returning to work, including lack of digital skills, unavailability of flexible working, lack of specific government initiatives, ageism, psychological barriers, and retraining needs.

The longer the unemployed worker remains out of work, the harder it is for them to find a suitable position and the greater their risk of falling into forced retirement.

The report calls for a government-funded employment programme targeted at those who need support in changing careers, starting from the first day of unemployment for the over 55s.

Lead researcher Dr Lynne Robertson-Rose from the University of Edinburgh added: “We set out to understand the financial vulnerability amongst those in their 50s and 60s and have been surprised by the bleak picture that the data paints.

“Any disruption in earning capability in the decade before the state pension is forcing older workers to draw down on savings earmarked for retirement with little ability to top up the pot, leading to the risk of financial vulnerability becoming lifelong.

“We have access to rich data supplied to Smart Data Foundry by UK financial institutions and these insights have furnished us with the information that enabled us to make policy recommendations. It also flags opportunities for the financial services and fintech sector to innovate in order to help individuals better manage their finances.”

Karen Barker, Head of Policy and Research at abrdn Financial Fairness Trust, added: “Making decisions about your pension is tricky to navigate, and for those on lower incomes, advice is too expensive.

“The Government needs to improve access to advice on pensions planning for those on lower incomes to avoid a living standards catastrophe.”

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New package of support to help over 50s jobseekers back into work

The UK Government has announced millions of pounds of new measures to tackle unemployment amongst the over 50s on benefits.

New measures set to help quarter of all jobseekers get back into work
Multi-million package will increase jobcentre support for over 50s including those thinking about retirement
Long term unemployed will be referred to the multi-billion-pound Restart Scheme which is already supporting a quarter of a million back into work

The new support follows ministers meeting their target to get half a million people into work in under six months, as part of the Way to Work jobs push launched in January.

Keeping up the momentum, £22 million will be invested in new measures to tackle unemployment amongst the over 50s on benefits, as a stable income is the best route for people to support themselves through challenging times.

Jobseekers over the age of 50 will have more one-to-one support at jobcentres to help them get into, and progress in work, boosting their earnings ahead of retirement.

This increased support will be boosted by 37 50PLUS Champions covering every district across England, Wales and Scotland who will work with local employers to help them realise how their recruitment could benefit from the talent of older workers.

Mid-life MOTs will also be available in jobcentres, targeting those thinking about retirement and engaging them to take stock of their skills and finances, and consider taking jobs that could boost their incomes based on their skills experience.

Minister for Employment, Mims Davies MP said: “Older workers are a huge asset to this country, and there are currently more than 400,000 over 50s in roles than before the pandemic.

“We’re increasing funding and support at every step of their journey up the career ladder, to ensure everyone gets the support they need to get into work, progress and use their experience to boost their earnings and plan for a better future.

“Helping people find the security of a stable income, through a job they can take pride in, is also one of the best ways for people to support their families during these challenging times.”

Carole Easton, Chief Executive at the Centre for Ageing Better, said: “Seeing DWP continue to recognise the importance of a bespoke approach to older workers is really welcome.

“We know that older workers face unique challenges, such as ageism in the workplace and a possible gap in skills compared to some of their younger counterparts, so we will gladly support any tailored action that begins chip away at these significant roadblocks standing in the way of older people accessing fulfilling work.”

Research shows that people over 50 are more likely to have caring responsibilities, with 12% of men and 16% of women aged 55-64 providing informal care and increased support from Work Coaches will help them navigate these barriers.

With the economy back on its feet, and the demand for experienced staff, the advice will help older workers make the right choice for them. And for those who have been out of work for nine months, the government’s Restart Scheme will provide a year of intensive support to get them back on the career ladder.

One year since its launch, the Restart Scheme is already seeing the first jobseekers take up work and leave the scheme and is currently supporting a quarter of a million people get the skills they need to re-enter the workforce.

This is part of the government’s renewed focus on growing the economy and helping people find work and boost their earnings.

Young workers hardest hit by coronavirus downturn

Over one in three 18-24 year olds, and three in ten workers in their early 60s, are receiving less pay than they did at the start of the year, compared to less than a quarter of workers aged 35-49, according to new Resolution Foundation published today.

The report is published on the day it was announced that UK unemployment rose by 50,000 to 1.35 million in the three months to March, when the effects of the coronavirus lockdown started to affect the economy.

The report, Young workers in the coronavirus crisis, based on a survey of 6,005 UK adults in early May and supported by the Health Foundation, examines how the current crisis has already affected workers of different ages in terms of their jobs, pay, hours and working conditions. It is published ahead of official labour market data today covering the three months to March this year (and only the very start of the crisis).

Previous Resolution Foundation research has shown that excluding students, young people tend to be hit hardest during downturns, and are particularly at risk in the current one as they are more likely to work in the hardest hit sectors of the economy, such as hospitality, leisure and retail.

Looking at workers’ current earnings compared to the start of the year, the research finds that employees across all age groups are more likely to be earning less than they did in January than earning more, though young and older workers are most affected.

Among 18-24 year olds, 35 per cent are earning less than they did before the outbreak, and 13 per cent are earning more. Employees in their early 60s are the next most likely to be receiving less pay (30 per cent), with a further 9 per cent receiving more pay. By contrast, 23 per cent of 35-49 year olds are earning less, while 5 per cent are earning more.

The research shows that young people are also the most likely to have lost work – though other age groups have been affected.

One in three 18-24 year olds employees have lost work, either through being furloughed (23 per cent) or losing their jobs completely (9 per cent).

One in five (20 per cent) employees in their late 20s (aged 25-29) have either been furloughed or lost their jobs, along with around one in six (18 per cent) workers in their early 60s (aged 60-64).

Employees aged 35-44 are the least likely to have been furloughed or lost their jobs, with around 15 per cent experiencing this since the crisis began.

The Foundation says the big pay reductions and job losses for young and older employees are a huge concern, for very different reasons.

Younger workers deeply affected by the crisis today risk have their pay scarred for years to come – causing a long-term reduction in their living standards. Older workers risk being involuntary retired well before reaching their State Pension Age, or not having time to make-up their current earnings shortfall. Both risks could cause a permanent hit to their incomes through retirement.

The Foundation says that the scale of pay reductions since the crisis began would be even greater where it not for the Job Retention Scheme. The research finds around one in five furloughed employees are still receiving full pay (despite state support being capped at 80 per cent), including over a quarter of workers aged 35-44.

Finally, the Foundation says that the Government needs to start preparing its response to the next phase of the crisis, which should include policies such as Job Guarantees for young people, and broader fiscal stimulus to boost demand in the economy and raise household incomes.

Maja Gustafsson, Researcher at the Resolution Foundation, said: “Our research confirms fears that young people are being hardest in the current crisis. One in three young people have been furloughed or lost their jobs completely, and over one in three had had their pay reduced since the crisis started.

“But while young people are in the eye of the storm, they are not the only group who are experiencing big income shocks. Britain is experiencing a U-shaped living standards crisis, with workers in their early 60s also badly affected.

“That is why the Government’s strategy to support the recovery should combine targeted support to help young people into work, with more general stimulus to boost demand across the economy and help households of all ages.”

Report: Young-workers-in-the-coronavirus-crisis

The number of people claiming unemployment benefit in the UK soared to 2.1 million in April, the first full month of the coronavirus lockdown.

The April total rose by 856,500, according to Office for National Statistics (ONS) figures.

Before the lockdown began, employment had already hit a record high before the lockdown began.

The situation is actually even worse than these desperate figures show – benefit claimant count does not include everyone who is out of work, since not all can claim assistance.

Oldies fly the flag for fuller working lives

Watford, north Dorset and the Shetland Islands lead the way against outdated stereotypes of older workers …

New figures reveal areas as diverse as Watford, north Dorset and the Shetland Islands to be leading the charge against outdated stereotypes of older workers and flying the flag for fuller working lives.

They are among local authority districts across Great Britain with the highest rates of employment amongst older workers, according to new information collated by the Department for Work and Pensions (DWP).

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Watford – home to the headquarters of several major companies – boasts the highest estimated employment rate amongst 50 to 64s.

Latest figures for April 2013 and March 2014 show Watford recorded 89.5% of this age group in work. The Shetlands followed closely on 88.3% and north Dorset on 87.2%.

Other high-performing areas include Stroud in Gloucestershire (85.3%), south Northamptonshire (84.6%), Horsham in Sussex (84.2%), and Tandridge in Surrey (84.2%). The remainder of the top ten is made up by east Northamptonshire (84.1%), Broxbourne in Hertfordshire (83.2%) and Stevenage in Hertfordshire (83.0%).

The City of Edinburgh is upper mid-table (72.7%), slightly ahead of East Lothian (72.5%) and Midlothian (71.7%) with Dundee (53.9%) and Glasgow (53.8%) trailing further behind.

DWP Minister Steve Webb said: The business case for ignoring outdated and inaccurate stereotypes and giving older workers a chance to thrive is absolutely compelling, and these figures show that in some parts of the country that message is being received loud and clear. What we must do now is extend the positive record we’re seeing in counties like Hertfordshire across the whole of the UK.

“If we want to ensure people have comfortable retirements, that business thrives and that our economy continues to recover, then equality of employment opportunity for older workers isn’t just a ‘nice to have’, it is essential.

“Another crucial point is that a person dropping out of the workforce early can have a devastating effect on their retirement income. We owe it to people to do everything possible to ensure they can benefit from a full working life.”

Dr Ros Altmann, the government’s Business Champion for Older Workers, said: “Older workers have a huge amount to offer any workforce. They generally have unrivalled life and work experience, often boast a broad range of skills and, according to many employers I’ve spoken to, tend to display great attitude and work ethic.

“Of course, there can be unique challenges faced by older workers – particularly in manual or strenuous jobs – but there is no reason why a person in their 50s or 60s cannot re-train to take on a different role with their existing employer, cut down their working hours, or even opt for a complete career change.

“We need to get rid of the traditional stereotype which suggests that people over 50 are too old to learn or change and are expected not to work, even if they want to. There can be a world of opportunities for older workers which can enrich their lives and also boost our economy.”

As well as highlighting the areas with the best records, the figures also show those places with the furthest to go to develop a labour market which makes full use of the skills and experience of their older working age population.

Areas in which around half of older workers are out of work include Hyndburn in Lancashire (48.1%), Rossendale in Lancashire (48.2%), west Somerset (49.2%), Tower Hamlets in London (50.6%) and Barrow-in-Furness in Cumbria (51.7%).

The prevalence of particular industries can make the challenge of providing equal opportunities for older workers more difficult in some areas of the country than others.

In types of work where this is the case, the government is keen to encourage employers to consider the benefits of retraining or altering the role of older employees, in order to keep their skills and experience on board.

Earlier this year, the government launched Fuller Working Lives, a piece of research and analysis highlighting the vast benefits that could be reaped by individuals, industry and the overall economy by tackling unemployment and economic inactivity amongst the over-50s. It also set out some of the specific factors which can often lead to older workers being forced out – or kept out – of employment early, before they reach State Pension age.

This followed landmark changes previously brought in by the coalition government to abolish the default retirement age – which previously forced many people to give up work before they felt ready – and extend the right to request flexible working to all employees.

The DWP is also promoting retraining opportunities available to older jobseekers through the Jobcentre Plus network.

There are around 650,000 vacancies waiting to be filled in the UK economy at any one time, with continuing economic growth creating new ones every day.