A mid-life employment crisis

The COVID-19 pandemic has triggered a labour market crisis. Despite unprecedented measures to prevent a rise in unemployment – including the state stepping in to pay the wages of over nine million furloughed workers – the claimant count has risen more sharply than at any time in the last century.

The crisis follows a period when employment among older workers had reached historic highs. This report, in partnership with Centre for Ageing Better, shows that there is a real risk is that the pandemic could reverse this trend, leading to long-term unemployment for older workers:

• The number of older workers seeking unemployment related benefits doubled during the lockdown. The number of claims increased by over 280,000 between February 2020 and June 2020, rising from just over 300,000 in February to over 580,000 in June.
• There is a risk of further job losses as the furlough scheme is unwound and as some sectors struggle to recover. One in four older workers – 2.5m in total – have been furloughed, and hundreds of thousands will be unable to return to their previous jobs. One in ten older male workers and one in six female older workers were employed in the ‘shutdown sectors’ hit hardest by the lockdown.
• Older workers who lose their jobs are far more likely to slip into long-term worklessness. Over 50s who are unemployed are twice as likely to be out of work for 12 months or more as younger workers and almost 50% more likely as workers aged 25 to 49.
• The pandemic has already had a significant impact on older workers’ finances. Two out of five older workers say that they are concerned that their finances will get worse as a result of the pandemic.

This report sets out three steps that the Government can take to support older workers to prevent long-term unemployment in the wake of COVID-19:

1. There is a need for further work to understand financial wellbeing among older workers, how the pandemic has affected them, and the options available to support them, so that appropriate action can be taken.
2. New back-to-work support programmes must not repeat the mistakes of the Work Programme.
3. The Government’s announcement of a broad programme of traineeship opportunities available to workers under 25 should be accompanied by support for all adults to retrain, including the over 50s.