Older Workers Key To Economic Success

While overall numbers of workers aged over 50 have increased in the last decade - due in part to the baby boomers entering this age cohort and a greater number of women in work - there is still a sharp decline in economic participation rates after the age of 55, and a corresponding reduction in tax income.

The report points out that successive governments have focused employment policies on helping younger ‘NEETs’ (Not in Education, Employment or Training) - despite 1 in 4 older workers being out of work. Older workers who do fall out of work, remain out of work for longer than people of other ages and are more likely to say that they experience age discrimination.

Society is failing to realise the tax-raising potential of this age group, the report argues. Official figures show that halving the employment gap between people aged 50 and State Pension age and those in their 40s could see income tax and National Insurance receipts rise by 1% (just under £3 billion) and GDP up to 1% (£18 billion).

It could also help to reduce the welfare bill, with £7bn a year currently being spent on benefits for people aged 50 to State Pension age who are out of work. Furthermore, enabling people to work for longer will give them more time to build up vital savings for retirement.

The net effect of these measures would be to reduce pressure on public finances brought about by people living longer, including increased spending on the State Pension and health and adult social care.

The report calls for government and employers to support older workers to stay in work for longer, help those who have fallen out of work involuntarily to return and to create workplaces that work for all, irrespective of age. In particular, this means:

• Access to flexible working hours and workplace adaptations to help people manage pressures such as caring responsibilities and health conditions, which become more prevalent with age
• Greater equality of opportunities in the workplace. Older workers in the UK experience age discrimination in recruitment and progression
• They are less likely to be offered opportunities for development
• Research shows they are also the most likely to be stuck on low pay and feel most insecure about their jobs

Changing workplace practices and creating an age-friendly employment culture is important for today’s older workers, and for younger generations, all of whom will face similar pressures as they age, the report says.

Patrick Thomson, report author and Senior Programme Manager at Centre for Ageing Better, said: “Older workers offer a solution to the fiscal challenge of our longer lives. We therefore need policy solutions that support and enable this increasingly important segment of the workforce.”