Why we need to support older workers to prevent pensioner poverty

Independent Age
Independent Age
Published in
4 min readJun 20, 2022

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Tim Whitaker is a consultant working on age and employment issues and a Trustee of Wise Age and Joint Convenor of the Royal Society of Arts Good Work Guild project on Inter-generational dialogue on work futures.

As the government’s cost of living “rescue operation” kicks in, there’s still an urgent need for policies to support older people in the future. But the core must be tackling the drivers of poverty for older people.

One new problem looming is the “great retirement”– the rise in “economic inactivity” of over 50s, particularly men who have simply exited the labour market during and since the pandemic and neither employed nor looking for a job. National data shows nearly a rise of over 228,000 in the 50–65s age group becoming economically inactive. This is on top of the unemployed over-55s. This bucks the pre-pandemic trend of people working longer and retiring later in life. And it’s not the traditional image of the affluent retiree going on cruises. Research shows it’s the less well off in the middle and lower-income bracket earning £18,000 to £25,000 per year, who rent and work in lower paid industries and declining sectors experiencing the highest rise in inactivity.

Those who’ve left jobs cite a combination of very mixed reasons for leaving — ageism, health, mental wellbeing, but worryingly many are resigned to being in this position. Many think they won’t get their job back in a declining industry and don’t see it worth continuing to work. Only a third of over-60s would look at returning to work. In London for example 77 per cent of over-60s had not gone back to paid work since losing or exiting their job which is a huge and wasteful loss of expertise and talent . The rise in inactivity among over-50s is already three times higher than it ever was after the last financial crisis and perversely at odds with a labour market with job vacancies.

The big risk for some older workers entering “retirement” prematurely is they face great uncertainty in future income and savings which could fuel more “pensioner poverty”.

Independent Age research shows pensioners who enter poverty tend to have had a low income when they worked. Plus, one of the highest risk factors for poverty is the 40 per cent who have no occupational or personal pension. The old assumption that you’ll have enough money and income when retiring is being shattered for many older workers who have left the job market.

The prospect of bleak times ahead for some “retired” is a growing societal problem. A survey of those over the age of 25 but who have not retired shows a quarter not confident that their work will enable them to meet their financial goals in retirement. Many people are not confident that they will be able to remain in work to their preferred retirement age. One-in-four people are not confident in their ability to secure work and are worried that ill health, discrimination, or the wrong skills will stop them from earning and saving what they need for later life. More than two-in-five people in the UK say they are not confident they will have enough savings to meet their future goals in later life.

These risks facing older workers mean we need a strategy to help them face these challenges. Essential is better data and evidence on who are most affected and at financial risk.

In terms of strategy the first key action for older workers is better bespoke employment support and advice to help them compete in the jobs market. The big challenge of becoming unemployed at 50 is getting back into the job market and you’re less likely to get a job than unemployed younger workers. Those in low paid and manual jobs face being forced out and the lack of skills and training of those workers is striking. The sad evidence is that as you age in the work place you receive less training.

Second, we need policies to tackle the underlying drivers of the current problems, most notably ageism in workplaces and the lack of age friendly practises by many employers. Older workers experience ageism in recruitment with well over a third report feeling disadvantaged in applying for jobs. Age friendly employers devise flexible working opportunities, promote career development, provide support with health conditions, help with caring responsibilities but focuses on a culture to allow workers of all ages to work together. This points to co-ordinated local action. Enlightened cities such as Manchester are providing support for their older workers and pushing for age friendly workplaces. Wales has an older workers strategy. And some local councils are thankfully beginning to develop support packages for older workers.

Third is much more effective financial advice for older workers, particularly to address the mismatch between perceptions and hopes and the harsh reality around retirement.

Pre-pandemic there were rosy expectations of older people working longer out of choice. Now we’re seeing that participation rates drop, but for some older workers wanting to work the spectre of them never working looms ahead with financial misery ahead.

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