Older Workers: Job Market Opportunities

Baroness Altmann Excerpts

Thursday 3rd March 2022 Grand Committee

Asked by

[Baroness Altmann]

To ask Her Majesty’s Government what steps they are taking to ensure that older workers can secure new opportunities in the jobs market.

[Baroness Altmann (Con)]

My Lords, I first thank the House of Lords Library staff for their excellent help with the background statistics for this debate. I also thank the Centre for Ageing Better for its helpful briefings. I declare my interest as a board adviser to the not-for profit community interest company Bravestarts, which is already helping many older people to find ways to return to work in later life. I am also an adviser to the International Longevity Centre. I also thank all noble Lords who have attended this short debate today.

For many decades now, average life expectancy has been rising and people have had longer periods in retirement. Recognising the dangers that this would pose to future public finances and growth in a rapidly ageing population, Governments have pursued policies of increasing state pension ages, abolishing mandatory retirement ages and encouraging longer working lives. Indeed, this House is a live example of the value added by the experience, maturity and energy of older people who are still working. Older workers bring valuable talent, skill sets, patience and wisdom, which are often lost when recruitment focuses only on the young.

The ideal scenario for many, as they enter their 60s and even 70s, may be to reduce working hours from full-time to part-time, which is why the trends towards more flexible employment are most welcome. They will allow people to build extra income both now and in the future, as well as boosting their pensions and overall economic growth.

The employment rate for over-50s and over-60s, especially women, had been steadily increasing, boosting the economy. The National Institute of Economic and Social Research showed that people retiring just one year later than previously can add one percentage point to economic growth each year. However, if more older people pull out of employment altogether, this source of economic growth disappears, the economic activity will remain permanently lower and the pension savings of those who are no longer working will be unable to last as long.

This is why there is a concern that, since the pandemic started—since December 2019—the indications are that the employment rate for those aged between 50 and 64 fell from 72.7% to just 70.9%, reversing a well-established long-term trend. Indeed, I argue that the jobs statistics released recently suggest that perhaps the single biggest challenge in the labour market at the moment is how we help older people to stay in or return to work. Despite record numbers of job vacancies—1.3 million—and with labour supply currently lagging behind demand, 600,000 fewer people are in work now than two years ago, and economic inactivity has risen in the past months, largely driven by the over-50 age group, particularly women.

The largest proportion of the economically inactive are the older women who are less likely to have private pensions or have much less private pension. That indicates that the pandemic may be having more worrying knock-on impacts than perhaps have yet been factored into economic forecasts, if it has reduced the ability and perhaps desire of people over 50 to stay in work and may have increased health inequalities in the population, which were already stark, with a 20-year differential in healthy life expectancy across the country. The employment gap for older workers relative to the average in the population and the disability employment gap have both widened. Once again, those trends of concern are reversing the positive gains seen up to 2020. It will be important to see whether those trends will reverse after Covid. I certainly hope so.

I commend the Government on their October 2020 Plan for Jobs programmes offering financial incentives for employers who are considering hiring new staff. I welcome the Restart scheme and the October 2021 expansion of support packages, with the lifetime skills guarantee, the national skills fund, skills bootcamps for adults and the over-50s champions in jobcentres.

We are seeing a potential that needs to be carefully observed by the Government. In our ageing population, commitments to encouraging longer working lives are important for long-term economic growth as well as individual well-being. The coalition Government asked me to be their older workers’ business champion. The plight and needs of the over-50s in employment or wishing to return to work were made clear in my report, A New Vision for Older Workers, with recommendations based around helping employers and individuals with what I called the three Rs: retain, retrain and recruit, which are all the essential ingredients of a successful strategy for increasing jobs, labour force participation and opportunities for the over-50s in the labour market.

Indeed, as work becomes physically less demanding, having the opportunity for people to enjoy working in later life is important. I know that it is also important to my noble friend the Minister and her department. I ask her to take back to her department the need for published evaluation and evidence on the effectiveness of schemes that have commendably been introduced and specifically designed to help the over-50s back into work. What works best? Is her department working on any detailed research projects, perhaps in collaboration with a university or the excellent departmental officials, to understand the interventions that can best assist in retraining, retaining and recruiting older staff who might otherwise be at risk of leaving the workforce?

Might the Government consider incentives for employers to create specific programmes to ensure that older people are seriously considered rather than overlooked when it comes to in-work training? Many older people are willing to accept lower pay in order to participate in training programmes or programmes to help them change career but find that they are not widely available for older applicants. With a number of employers, I organised schemes for older apprenticeships, but older people often did not seem to believe that they should apply because “apprenticeship” relates, in their minds, to younger people. Might the Government consider the same kind of principle but maybe calling such schemes “career changer” incentives or “new career” programmes, to ensure that employers are encouraged to offer opportunities for training to new recruits at older ages? Individuals may be more likely to apply.

I also hope that my noble friend will consider whether companies might be required to report on what they are doing to ensure they are providing an age-friendly environment at work, one that offers the flexibility for part-time, but also includes in retraining those of all ages and career stages, fairer consideration of older applicants when recruiting and proper age audits as part of their diversity, training and recruitment strategies.

Making older workers feel valued is really important for all our futures. In the context of pensions, I have concerns about people pulling out of the labour market early. Are they just using their private pensions to bridge themselves from age 55 to 65, until their state pension starts, but have nothing left later? Will my noble friend encourage the Treasury to monitor and conduct research into what is happening when people are taking money out of their pensions? Making workers feel valued is important. Benefiting from the wisdom that comes with age and being part of a successful workforce can help with our Covid rebuilding programme.