‘Lost generation of unemployed’: Covid hits careers of over-50s

Credit offers

Lisa Griffiths, a 61-year-old special needs nanny, has spent her career easily moving from one contract to the next. So when her last, five-year contract ended recently, she was shocked to find new employment opportunities far more limited than she had expected.

Then, while she was considering her options, the pandemic hit and work dried up altogether.

“It’s been a real shock for me, and my fear is that if this enforced unemployment is not only to do with the pandemic but my age as well – I have no evidence that it is ageism but I have a strong feeling that it is – then things are going to get worse and not better,” she said.

UK’s Covid unemployed: ‘Financial insecurity drives stress and anxiety’Read more

“If I retire earlier than the state pension age and then my husband loses his job, it would be a catastrophe,” she added. “I know there are things like universal credit but we’ve never had to lean on government support before and I’m not sure that my husband would even entertain the idea.”

Since the Equality Act 2010 made it illegal to discriminate against someone based on age, employment rates among people aged 50-plus have steadily risen. Before the pandemic, rates had reached a historic high, with a record 10.7 million people aged 50 and over in work – nearly a third of the UK workforce.

The story of older people and employment was largely one of those rare things: a good news story that brought almost everyone and everything with it, individuals, society and the economy alike.

View image in fullscreenLisa Griffiths fears things are going to get worse and not better. Photograph: David Levene/The Guardian

This economic trajectory made everyone a winner, said Lily Parsey from the International Longevity Centre UK. “One common argument against greater labour market participation in older age is that it will somehow prevent younger people from entering paid employment by taking all the jobs from them,” she said.

  Christmas parcels: the best deals for sending your gifts in the UK

This argument is, however, built on false assumptions: in March 2020, at least 80% of employment growth in the UK was estimated to come from workers over the age of 50.

There were, of course, parts of the demographic untouched by the good news. Even before the pandemic, there were about 800,000 people aged 50-64 not in work, who wanted to be. More than 1 million 50-64s were out of work for health reasons, 300,000 of whom wanted a job.

Nevertheless, things were going in the right direction. But then the pandemic struck. It has been, of course, disastrous for great swathes of workers across the board, especially those aged 18-24, whose employment rate has fallen 3.5 percentage points (ppt) since March compared with just 0.4 ppt for those aged between 35 and 49. For older workers, the drop in employment has been somewhere in the middle, at 1 ppt.

But cut the data another way – in terms of percentage increase of unemployment – and the age group most affected by the pandemic are those aged 50 or over. There are now 91,000 more unemployed older people than there were 12 months ago: an increase of a third in a single year, significantly more than in any other age group.

Apply for a credit card

That third is significantly more than both the national average increase of 24% and the 25% increase in unemployed people aged 18-24. For those aged 25-34, the increase was 28%, and for those aged 35-49, the increase was 19%.

That third represents 407,000 individual stories of later life unemployment, a group that now makes up one in four of all unemployed people in the UK.

  Is our solicitor wrong when she says we owe £10,500 in stamp duty?

There are now 91,000 more unemployed older people than there were 12 months ago: an increase of a third in a single year, significantly more than in any other age group

This matters because despite the advances of the last decade, redundancy is a particularly age-related problem: people aged over 50 who lose their jobs are significantly more likely to suffer long-term unemployment than other age groups, with older workers who lose their jobs being more than twice as likely as other age groups to be unemployed for at least two years.

Another worrying point, made by Dr Anna Dixon from the Centre for Ageing Better, is that the apparently healthy-ish employment rate for those aged over 50 is masking something else: people who are on furlough, or who have had their hours cut, are still showing up in this data as “employed”. But their job may not be safe.

“Over the summer, furlough rates showed a U-shape, with younger and older workers the most likely to be away from work,” said Dixon.

By September, however, furloughed 55-64s were the least likely to be fully back at work. “So, while it superficially looks like older workers will be ‘second-hardest’ hit by job losses in this recession, once we factor in the fact that it is older workers who are at greatest risk of long-term unemployment, it is clear that after this pandemic there could be a lost generation of unemployed over-50s forced into an early retirement they neither want nor can afford,” said Dixon.

Older workers who lose their jobs are more than twice as likely as other age groups to be unemployed for at least two years

This, said Stuart Lewis, founder of Rest Less, the jobs site for the over-50s, is catastrophic for hundreds of thousands of older people. Contrary to popular belief, he said, most fifty- and sixtysomethings are not revelling in their gold-plated, final salary pensions – a long-lost preserve of their parents’ generation – and they haven’t had enough time under pensions auto-enrolment to have amassed equivalent savings.

  House prices tipped to rise by twice as much in Yorkshire as in London

Instead, said Lewis, many face a significantly underfunded retirement and are seeing what savings they do have decimated by the pandemic. This in turn will lead to a significant long-term drop in their future retirement income – and spending – which risks stalling the UK’s economic recovery for years to come.

“Those in their 50s and 60s are in a far more financially precarious position than most people imagine,” he said. “It’s tragic to think that more than 626,000 over-50s are now claiming universal credit, meaning that after three decades in the workplace, they have less than £16,000 of savings to their name to qualify for universal credit.

“It’s also useful to reflect that in the last recession women could retire at 60 and receive the state pension; today it’s 66,” he added. “This means that someone made redundant at the age of 55 still has to find meaningful work, or try to survive on universal credit, for the next 11 years before they can claim the state pension.”

Everyone agrees that this isn’t just a personal tragedy for the older generation, it’s a problem for us all: harnessing the potential of workers, regardless of their age, will be crucial in the post-pandemic recovery. With an ageing population, we cannot afford to leave anyone behind.