11th March 2015
Helping more people over 50 into employment could boost the economy by up to £25 billion a year, a new report has found.
The study by Ros Altmann, the government’s business champion for older workers, looks at ways to help more over 50s stay in or return to work including apprenticeships for older people, action to counter discrimination in recruitment and training to address skills gaps.
It argues that there is an economic case for longer working lives. Research by the National Institute of Economic and Social Research (NIESR) suggests that if people worked an extra three years this would add up to 3.25% in real Gross Domestic Product (GDP) per year by 2033.
In today’s terms, adding 3.25% to 2014 GDP would be equivalent to an extra £55bn. Contrary to popular myth, the report claims there is evidence to show that keeping more older people in work actually improves employment prospects for younger generations, and has in some cases even increased their wages.
There is also a clear business case as the ageing workforce is already starting to cause skill shortages in certain sectors which will only worsen in future years if the most experienced workers retire as before, Altmann suggests.
A fuller working life can also give individuals the chance to have the retirement they choose as well as the other social and psychological benefits that working provides. So encouraging later life working is good for the economy and good for individuals – and it is also good for business, she argues.
If half the 1.2 million older people – who are currently unemployed or inactive and would like to work – were to move into employment this could boost GDP up to £25 billion a year. By 2022, there will be 700,000 fewer people aged 16 to 49 in the UK workforce but 3.7 million more people aged between 50 and state pension age.
Dr Altmann’s proposals include:
Coach operator National Express this week launched an apprenticeship scheme aimed at recruiting people for whom age and extended career breaks can pose a barrier to finding employment.
Dr Ros Altmann said: “The need to retain, retrain and recruit workers over 50 is becoming increasingly important as the population changes and people live longer.
“I have set out to challenge outdated stereotypes, unconscious bias and age discrimination, which all contribute to preventing older people from staying in or returning to work.
“There are many ways we can tackle this – which I have addressed in my report – including apprenticeships for those over 50, flexible working and better training for line-managers. Acting upon my recommendations will bring benefits to us all.”
Minister for pensions Steve Webb said: “Beyond the age of 50, people start falling out of the workplace at dramatic rates – but there is a compelling economic and business case for overcoming these obstacles to access this vast untapped talent in the UK labour market.
“The government has made a good start by abolishing the default retirement age and extending the right to request flexible working. But it is clear that old-fashioned and outdated perceptions still persist.
“From next month, we will be trialling targeted and intensive support for older jobseekers, including rolling out an ‘older workers’ champion scheme across every part of the UK, and we are seeing more firms open apprenticeships up for people of all ages.”