Updated 7 February 2013
Improving back to work support for older workers
The Government is committed to improving the labour market position of older people.
Working longer can have a positive impact on an individual’s savings for retirement, but also for the economy as a whole, for example:
- retiring 2 years after State Pension age and continuing to save in that time can enhance private pension income by 20% – conversely, retiring 2 years before State Pension age and drawing down your pension can reduce it by 18%
- a one year extension to everyone's working lives could increase real GDP by around 1% about 6 years after its implementation.
There is a commonly held misunderstanding that increasing employment for older people blocks jobs for younger workers. However, a recent report by the Institute for Fiscal Studies concluded there was: "no evidence of long-term crowding-out of younger individuals from the labour market by older workers".
A range of measures are in place to support older people in choosing to work longer:
- ending the Default Retirement Age (DRA) so employers can no longer force employees to retire just because they reach the arbitrary age of 65
- financial incentives to work beyond State Pension age, for example a higher pension payment or lump sum by delaying a State Pension claim
- initiatives aimed at helping employers to support older worker employment and flexible working
- retirement practices and legislation that seek to protect people from age discrimination.
- Default retirement age (GOV.UK)
Out of work support
Out of work older people can find it more difficult to get a job and they are more likely than younger people to remain unemployed for longer. For example:
- over 45% of unemployed over 50s have been so for 12 months or more
- around 32% of Jobseeker’s Allowance (JSA) claimants aged 18 or over have been claiming for more than 12 months
(International Labour Organisation’s (ILO) definition)
We are modernising the way we deliver our back to work services, and Jobcentre Plus managers and advisers now have more flexibility to help older claimants to find employment. Apart from some specific options for jobseekers aged under 25, older people have the same access to a comprehensive menu of individually tailored help. This includes the Get Britain Working measures, such as:
The Work Programme provides support for those who are more at risk of long-term unemployment.
Changing attitudes – Age Positive
DWP works with employers and employers’ organisations, through the Age Positive Initiative, to
- challenge outdated assumptions about older workers
- drive forward sustained improvements in the employment and retention of older workers as part of a mixed age workforce.
Thriving businesses, large and small, and across all sectors, report the benefits of employing younger and older workers.
McDonald’s
20% higher performance in those outlets that employ workers aged over 60 as well as younger workers.
South Wales Forgemasters
"We have no retirement age. There are no concerns about reduced progression opportunities and the process of training new staff has been improved greatly by involving experienced, skilled workers as trainers on the company’s apprenticeship scheme."
