Written evidence submitted by Centre for Ageing Better (COV0113)

1.      About the Centre for Ageing Better

1.1  The UK’s population is undergoing a massive age shift. By 2050, one in four people will be over 65[1]. The fact that many of us are living longer is a great achievement. But unless radical action is taken by government, business and others in society, millions of us risk missing out on enjoying those extra years.

1.2  At the Centre for Ageing Better we want everyone to enjoy later life. We create change in policy and practice informed by evidence and work with partners across England to improve employment, housing, health and communities.

1.3  We are a charitable foundation, funded by The National Lottery Community Fund, and part of the government’s What Works Network.

2.      The impact of Covid-19 job losses falls after 25 – but starts to rise again among people in their 50s

2.1  Nearly 1.8 million people have applied for Universal Credit from the 6 weeks to 12th April, more than five times higher than the same period in 2019[2]. Over the last decade, the gap in the employment rate between adults aged 50 – 64 and those aged below 50 nearly halved. The coronavirus crisis risks reversing this progress, with hundreds of thousands of older workers are at risk of losing their jobs. Despite the government’s massive investment in supporting businesses through this crisis, many people have lost their jobs or have reduced hours and earnings. This is likely to have a significant impact on their financial position and ability to save for the future.

2.2  Two different studies – a survey rapidly rolled out by Cambridge economists, and an analysis of the age-makeup of the hardest hit sectors by the Institute for Fiscal Studies (IFS) – tell the same story: it is the under 25s who have the highest probability of losing their jobs in this crisis.

2.3  The Cambridge survey[3] found that 10% of under 30s who had been in work in the four weeks prior to their survey said they had been made unemployed because of the coronavirus. Many more expected to lose their job by August. The IFS[4] found that employees aged under 25 were about two and a half times more likely to work in a sector that is now shut down – like hospitality, or non-food retail – than the rest of the workforce. Even taking into account that under 25 are much less likely to be the key earner for their household, the young still came out as the hardest hit.

2.4  Both studies show that the chances of being unemployed as a result of Covid-19 fall with age. But they also show that chances start to rise again among people in their 50s. The IFS do not include manufacturing – a sector with an older workforce – in their analysis. But the Confederation of British Industry (CBI) points out that some parts of the manufacturing sector are significantly exposed to this downturn. And of course, these figures – the number of people facing unemployment now – only tell part of the story. Even more critical is what happens next: how easy they find it to find a job again once the economy begins to recover. And it is in this area that older workers are particularly vulnerable.

2.5  Looking at different sectors can give us some indication of potential consequences across the labour market. We know that business owners up and down the country – particularly small ones – are struggling to stay afloat. Construction and some areas of manufacturing are likely to be particularly hard hit by this crisis[5] – both also employ a high proportion of people over 50. The Trades Union Congress (TUC) has named construction as a potential victim of this crisis: another sector dominated by over 50s.

2.6  3.4 million key workers are over the age of 50, making up almost a third of all key workers and an estimated 130,000 are over the age of 70[6]. Older workers are the backbone of Britain’s public services and are vital to keeping going through this crisis. It’s never been more crucial that they are supported in their work. The Resolution Foundation has highlighted that being a key worker continuing to work may be a particular health risk for this age group[7]. They must receive sufficient financial support if unable to work and are supported to return to work following sickness.

3.      People over 50 who lose their job in the crisis will face greater challenges finding a new one in the recovery

3.1  We know that any older workers who have lost their job are likely to face deep and long-lasting consequences, without a concerted effort from the government and employers. We cannot allow a cohort of people in their 50s and 60s to be pushed out of work before their pension age: leaving them financially struggling both now and in their later life. The potential productivity loss from a spike in early retirements is one that our economy cannot afford. 

3.2  In 2019, just a third of over 50s who were made redundant found re-employment within three months: the lowest re-employment rate of any age group[8]. Just 1 in 5 people over 50 who were referred to the government’s work programme came out with a job: the worst outcomes of any group[9]. A third of over 50s we surveyed last year believed they had been turned down for a job they had applied for because of their age[10].  

3.3  Recent policy initiatives on training have not catered for the needs of older workers with only minimal provision for those aged 50 and over.  Only 10% of people aged 50-59 reporting they recently took part in training in 2015/16. 86% of spending on adult education in the UK targets the under 25s16.  As unemployment grows, older workers must be supported to retrain and return to work or many will face long-term consequences of being under-pensioned in retirement. Although the government have committed money to training and skills, this must not only be for younger people, particularly if the job market changes dramatically after Covid-19.

3.4  It’s vital then that as we move forward, job seekers in this age group get the sort of help they need. Jobcentre Plus has changed dramatically in the last couple of weeks: moving from an organisation that concentrates on getting people into work, to one which is putting all its resources into processing benefit claims as quickly as possible. When it starts to look like we’re emerging from the other side of this, DWP will need to quickly change again, focussing on early intervention to support the newly jobless so that they don’t become the long-term unemployed. Once they do, tailored support for older jobseekers will be vital, if we want the best chance getting this group back to work. 

3.5  It’s not just the newly unemployed who are at risk. We do not know what the world that currently furloughed workers will return to will look like. Prior to this crisis, redundancy rates for the over 50s were higher than any other age group[11]. If there are fewer jobs to go back to, there is a risk that older workers will be hardest hit. The Committee must press the government on its plans to put in place specialist support those in their 50s and 60s who are at risk of long-term unemployment as a result of the virus.

3.6  For some, this may be by choice: viewing their furlough or redundancy as a signal to accept an unplanned, early retirement. Inadequate preparation, unplanned early retirement and reduced income will be damaging for people’s long-term financial position and pension savings are also likely to be negatively impacted by the downturn in the stock market.

4.      Economic insecurity at any age makes it harder to age well: but we cannot abandon those who are vulnerable right now

4.1  It is absolutely right that a large portion of the policy attention in the wake of Covid-19 should be focussed on young people whose work and financial trajectories across their whole life risk being decreased. If income inequalities are allowed to deepen as a result of this crisis – and the hit on low-paid workers makes that a very real risk – then a large number of people will end up entering their later life without enough money, without a decent home, and in poor health. The more challenges you have early on in life, the more barriers you will face to ageing well.

4.2  But we must also not forget the group of older workers who are vulnerable right now. In the months ahead, we will need to see tailored support for older job-seekers, and help for those facing redundancy to re-skill and re-train. Allowing skilled and experienced older workers to drop out of the workforce would dramatically impact the wider economy, and create hardships for millions of workers at risk of long-term financial insecurity. 

4.3  There are also risks that in addition to the economic shock and growing unemployment resulting from Covid-19, that policies to ease restrictions and schemes to retrain and support people back into work exacerbate the barriers facing older workers and contribute to excluding them from the labour market. The impact of continued restrictions on ‘vulnerable’ groups could have a huge impact on the ability of older workers to continue to work. Discussions around relaxing restrictions on movement more slowly for those who are older or with health conditions is likely to impact on decisions of employers to retain employees or likelihood to offer training or promotion. 

5.      A large percentage of the self-employed workforce are over 50

5.1  Older workers are a huge part of the workforce, including those who are self-employed. Rest Less and ONS found that 46% of the self-employed workforce is over the age of 50.[12] Although the government have provided funding to cover most of the self-employed workforce, the delay in payment and the increase in taxes further down the line could dramatically impact the long-term sustainability of self-employed workers.

5.2  Recent analysis from the Institute for New Economic Thinking at Cambridge University suggests that the self-employed and those in non-permanent jobs were most likely to experience financial shocks due to Covid-19, with 75% of the self-employed, 66% of temporary workers, and 66% of workers with variable schedules set by their employer earned less at the end of March compared to 26% of permanent, salaried employees[13].

5.3  ILC-UK analysis shows that that full-time self-employed workers aged 55+ earn less than younger workers, and over £100 a week less than their employee counterparts[14]. They also found that a third of older self-employed workers work part time and they may also be receiving a retirement income. This means they are less likely to earn more than 50% of their total income from self-employment, and therefore they do not qualify for government support.

5.4  The BEIS Committee should carefully scrutinise the impacts of the Self-Employment Income Support Scheme, particularly the delay, arbitrary exemptions and increased tax for older workers.

6.      Working from home may have significant impacts on our ability to age healthily

6.1  Working from home is possible if the work is online but many roles are still impossible to do remotely. Many workers do not have a work email address, let alone the equipment to access it. Fewer than one-in-ten of those in the bottom half of earners say they can work from home[15].

6.2  The Institute for Employment Studies published some early findings from the impact of the lock down on health and wellbeing of remote workers[16]. They showed there has been a significant increase in musculoskeletal problems, 60% were exercising less, 30% were eating less healthily and 48% reported working patterns that include long or irregular hours. We know that many of these health impacts such as MSK are particularly associated with older workers and can be a driver for early exit from the labour market. Although the health sector has been encouraging exercise at home, employers need to ensure their working practices are supporting workers’ health and not creating long-term problems.

7.      Coronavirus does offer some opportunities to the future of the workforce and the support employers can provide older workers

7.1  Amongst the challenges and uncertainty, this crisis has produced some potentially positive opportunities. The kind of workplace flexibility that carers and people with health needs have been pushing for has suddenly become possible in many organisations. Flexibility is essential for many employees to continue working and hopefully access to these new working arrangements could, in many sectors, become more widespread. As the government prepares to consult on extending the right to request flexible working and a right to carer’s leave, it should carefully consider lessons learnt from employers as a result of Covid-19 to improve flexible opportunities in the long-term. Lessons can be learnt from other innovations, too: support provided for retired nurses and doctors to return to work – something which could benefit those wanting to come out of retirement in other industries too.

7.2  A spotlight is also being shone on responsible business as the public become more aware of employers who have sought to safeguard jobs and look after the welfare of their staff. Ageing Better have been working with the employers to encourage age-friendly workplaces that support older workers to remain in good work for longer. Employers who have embraced good practices and have been flexible during this crisis have been praised in the media and retained staff morale. Line managers are learning to be empathic and trusting, and employees are talking honestly about wellbeing and mental health. Maybe this could be a turning point for employers to take a stronger look at their culture and employee wellbeing to ensure staff are fully supported in the long-term.

8.      What the Centre for Ageing Better are doing:

8.1  We are working with the Learning and Work Institute to assess the impacts of Covid for workers aged 50 and over. Using both quantitative analysis and modelling based on the latest statistics, and qualitative research to bring out the voice of older workers, we will explore how the crisis is affecting adults in mid to late career. Building on existing evidence, we will set out how we can tackle worklessness among the over-50s post crisis to better inform policy makers about the specific challenges facing this age group. This research will be available in early July and we would welcome the opportunity to discuss the findings with the Committee.

8.2  The Centre for Ageing Better is also currently leading several projects that will inform how older workers at risk of being excluded from the labour market can be supported. This includes a partnership between Greater Manchester Combined Authority, Ageing Better, DWP & JCP to develop and deliver a 50 plus employability pilot to unemployed economically inactive individuals in identified area/s of Greater Manchester.  

8.3  We are delivering a redundancy and retraining project in the West Midlands, for over 50’s either at risk of redundancy or have recently (within 3 months) been made redundant. The objective is to compare the level of redundancy support provided across corporate and SME employers and also the level and quality of training provision provided for over 50’s. We also want to increase the retention of skills and expertise within the employment sectors through redeployment.  

8.4  Other projects are gathering insights into employment projects delivered for over 50’s in selected Combined Authority regions and evaluating a programme commissioned by the National Lottery Community Fund to get carers into employment in certain areas of Greater Manchester. 

8.5  We are completing a pilot project with Timewise looking at good quality flexible working for older workers with two employers. Some interim key findings have been published[17] and guidance will be published in Summer 2020. This will provide a useful framework for employers to support older workers to work flexibly during the Covid-19 impacts. 

8.6  We have commissioned a set of research projects through our Good Recruitment for Older Workers (GROW) project which will explore the recruitment landscape, experiences of older applicants and how the hiring process can be less age biased. These projects will be set in the context of the impact of Covid-19 on the jobs market. 

9.      How the government can address this in its response: 

9.1  In the short-term: 

9.1.1        The government should consider offering day 1 support for skills and retraining for people over 50 who are at risk of becoming unemployed. They should offer a support package alongside the Job Retention Scheme to help employees retrain and use the time effectively.

9.1.2        Consider the impact on the employment of older workers in any policies that lift restrictions on movement on the basis of age. 

9.2  In the medium and long-term: 

9.2.1        Fund and design tailored back to work support which meets the needs of older workers. Continue to engage with the Centre for Ageing Better on implementing findings of our projects on back to work support. 

9.2.2        Ensure re-training support is also directed to older workers who may need to develop new skills to change career. The National Retraining Scheme should start a wider conversation about lifelong learning to develop a full offer for older workers who are employed or unemployed.   

9.2.3        Maintain momentum on its policy development addressing health at work by bringing forward proposals as soon as practicable. 

9.2.4        Consult on flexible working and allow all employees to request flexible working from the date of hire.

9.2.5        Run an inquiry to explore whether employees have been discriminated against based on age and health during the crisis.

May 2020