Latest labour market stats show government needs to show greater ambitions for older workers

The government needs to show greater ambition for the working lives of older people if it is to meet its manifesto pledge of an 80% employment rate for the country, a collective of expert organisations is warning.

The 50+ Employment Taskforce is calling on the government to target raising the employment rate of 50-59-year-olds to 80% and the employment rate for 60-66-year-olds to 50% within the next ten years.

The Taskforce says the target is well within reach with the right policies to improve the quality of back-to-work support and to get employers on board.

When the state pension age begins to rise to 67 in 12 months’ time, there are expected to be 900,000 people aged 50-66 who will be either unemployed or economically inactive but interested in working. Getting just half of these back into work would deliver the necessary increase in 50+ employment rates. This would ensure the government can meet its overall 80% employment rate ambition.

Analysis from the Centre for Ageing Better, part of the government’s What Works network, reveals:

• Employment rates fall below the 80% employment rate target at 53 and plummet to just 50% at 64 – three years before the new state pension age kicks in.
• Currently 1.1 million working-age people in their sixties are living in poverty – almost a quarter (23%) of this age group.
• The UK has similar employment rates among its 25-54 age group as other countries that already have an overall 80% employment rate such as Iceland, Switzerland, and the Netherlands. But it lags woefully behind in employment rates for 55-64-year-olds (16 percentage points lower than Iceland).

Dr Emily Andrews, Deputy Director for Work at the Centre for Ageing Better, said: “The government showing greater ambition to have more older workers in the economy is vital for people in their 50s, 60s and beyond who are facing significant financial challenges.

“Another rise in the state pension age looms on the horizon but our ageist labour market means that many people in their mid-60s are struggling to find work and struggling to make ends meet. The 60-64 age group has the highest poverty rates for any adult age group over 25. The last time the state pension age increased, poverty rates doubled for those on the cusp of eligibility.

“But the impact of raising employment rates for the 50+ goes well beyond what would benefit that age group. The government desperately needs to achieve this if it is to meet the economic growth plans it set out to voters last summer. The two key age groups for workers that will fill the labour and skills shortages of employers are those aged under 25 and those aged above 55. The government has shown it is committed to tackling youth unemployment, now it needs to do the same for workers entering the final third of their working lives.”

Christopher Rocks, lead economist and head of secretariat, the Health Foundation, said: “We know that when people in their 50s and 60s leave the workforce, it can harm both their financial security and long-term health. Good work – that is flexible, secure, and well designed – helps people stay in work for longer and age well. If the government wants to increase employment among older workers and raise the State Pension age sustainably, it needs to take action to help people remain in work when health issues arise, and work with employers to improve access to good-quality jobs that reflect the realities of longer working lives.”

Alice Martin, Head of Research, Work Foundation at Lancaster University, said: “As the pension age rises and worker shortages in key sectors bite, supporting older workers to stay in employment is essential to sustaining our economy. Without action, millions risk being pushed out just when we need them most. We need jobs that support good living across our lifetimes – including adequate paid time off for health and caring responsibilities.”