date: 11 August 2006
embargo: 6am Monday 14 August
Over one million 50 - 65 year olds who want to work can't get a job because employers won't recruit older workers or retain the ones they already employ by investing in training or making minor adjustments for disabilities, according to a TUC report published today (Monday). Employers and government must defuse the 'demographic timebomb' of a rapidly ageing workforce being pushed out of jobs and on to benefits and early pensions, by introducing policies and practices to retain and recruit workers over 50, says the TUC.
The report, 'Ready willing and able', rubbishes the myth of luxury early retirement for the 'baby boom' generation. Of the 2.6 million 50-65 year olds who are currently unemployed or economically inactive - that is not working or actively looking for work - over a third want a job, with 250,000 actively looking and 750,000 who say they want work. Also, despite an average retirement age of 63, only 12 per cent of non-working 50 - 65 year olds fit the stereotype of 'early retired, affluent professionals', only a third retire early 'fully voluntarily' and many survive on state support such as Incapacity Benefit or inadequate occupational pensions until they reach state pension age (65 for men, 60 for women but rising to 65 between 2010 - 2020).
Over the next ten years the number of people under 50 will fall by 2 per cent while the number aged 50 - 69 will rise by 17 per cent, massively increasing the ratio of pensioners to working people. The TUC estimates that without an extra one million people in work by 2015 workers will face higher taxes, later retirement or old-age poverty. The report warns that government plans to tackle the problem by raising state pension will simply push even more older people on to benefits, unless employers stop discriminating against older workers and adopt 'age management' strategies to retain over-fifties.
TUC Deputy General Secretary Frances O'Grady, said:
'Most baby boomers are not retiring early to cruise around the world or go bungee jumping. They have been dumped out of work and on to the scrapheap and are scraping by on benefits or small work pensions.
'By refusing to retain and recruit older staff, who want to work, employers are accelerating the demographic timebomb the economy is resting on. Companies need to ditch tired stereotypes of fifty and sixty-somethings and develop 'age management' policies which capitilise on the value of experienced staff by offering retraining and flexible working, and making minor changes for people with disabilities.'
Raising the fifty-something employment rate - steps for government and employers
The TUC is calling on employers to carry out age audits of their staff to establish an age profile of their workforce and negotiate an 'age management' policy with trade unions and employees to eliminate age discrimination and retain older workers. This should include identifying and supporting training needs and offering older staff flexible working to 'downshift' towards retirement. To underpin such measures the government should extend to over-fifties the right to request to work flexibly and the right to training with paid time off.
Age management policies should consider requests for reasonable adjustments to work stations, equipment and working practices for older workers, many of whom may have a right to this under the Disability Discrimination Act.
Healthy ageing and maintaining the ability to work depend on health and fitness over the whole life cycle not just in old age. A 65 year old who has exercised for 20 years loses no physical capacity and is fitter than a younger colleague who doesn't exercise. The government should promote healthy living across the whole lifecycle and employers should introduce training in good ergonomic practice and new technology, and workplace exercise programmes.
Key findings from 'Ready willing and able'
- As the population ages the 'dependency ratio' between workers and pensioners is increasing. By 2016 the number of people under 50 will fall by 2 per cent, while the number aged 50 - 69 will rise 17 per cent. This increased ratio would be offset as far forward as 2050 if 80 per cent of working age people were in work, also, an increase in state pension age would be unnecessary. TUC estimates that to reach an 80 per cent employment rate one million extra workers are needed by 2015, an extra two million by 2024 and an extra three million by 2042.
- The UK has a higher employment rate for older workers than most EU countries, with 1.5 million more older people in work than in 1997, but has the second highest proportion of inactive 50 - 65 year olds who want to work, double the EU average.
- The employment rate falls 16 per cent for men aged between 50 and state pension age compared to that of 35 - 49 year olds (from 88% in employment to 72%) and 8 per cent for women (from 76% to 68%). Economic inactivity rates double between age 55 and 60 for men (from 17% to 35%) and women (from 31% to 60%).
- Of the 2.6 million economically inactive 50 - 65 year olds in the UK, more than a third want a job, this includes a quarter of those with less than 5 years to state pension age. Of the one million older people who want to work just under half are women (approx 425,000).
- Poor health is the commonest reason people aged between 50 and state pension age leave a job and nearly half (45 per cent) have suffered a health problem for at least a year. Older people in the UK are much more likely to be economically inactive due to a disability than in any other EU or OECD country, this is especially true for over 60s.
- One piece of research showed that 40 per cent of men and 20 per cent of women retired earlier than they expected, and employers instigated two thirds of these early retirements. Another study found that half of those retiring early said it was their choice but only a quarter had voluntarily accepted a good deal.
- One fifth of men, and just under a third of women aged 50 - 65 have no formal qualifications and median gross annual pay for over 50s (17,900) is 4000 lower than that of 30 to 49 year olds.
- More people say they have faced age discrimination than any other type with those over 55 being almost twice as likely to suffer this than any other form of discrimination.
- Sterotypes about older people are false. Physical ability is dependent on health and fitness across the whole lifecycle, psychometric and cognitive capabilities do not deteriorate until well after state pension age and over-50s are positive about learning IT skills. Also, older works are off sick less than younger workers as they tend to have fewer but longer spells of absence and fewer short spells.
NOTES TO EDITORS:
- 'Ready willing and able' is available at: http://www.tuc.org.uk/extras/over-fifties-unemployment.pdf
Media enquiries: Ben Hurley T: 020 7467 1248; M: 07881 622416 ; E: [email protected]
Issued: 14 August, 2006