Saga calls for long term strategy for the long term unemployed

Wednesday 20 July 2016

Commenting on today's Labour Market Statistics, Saga's director of communications Paul Green said "It is great that the official rate for those out of work has fallen to the lowest since 2005. However, this good news disguises the fact that people who lose their job in later life find it really difficult to get back into work and suffer long term unemployment for much longer than other age groups.

Saga calls for long term strategy for the long term unemployed

"Saga has long argued that Employer's National Insurance should be cut, if not abolished, for the under 21s and those in long-term unemployment, and whilst this has been applied for businesses recruiting younger workers, we believe it's now time to turn attention to the forgotten army of older skilled workers and other who are long-term unemployed.

 

"The new Secretary of State for Work and Pensions, Damian Green has made it clear that the Government wants to continue to build on the employment success story, and we urge him to press for measures to encourage and incentivise employers to give the long-term unemployed the chance to get back to work.

 

We need a long term strategy for the long term unemployed."

Key points:

 

  • The rate of unemployment across the UK fell once again in the three months May 2016, down to 4.9% compared with the 5.6% recorded during the same period a year ago.  
    • Similarly, the unemployment rate for those aged 50-64 fell to 3.4% in the three months to May 2016, down from the 3.6% recorded in the previous reading.
  • The total number of people classed as long-term unemployed[1] in the UK has dropped over the last 12 months to 461,000 in the three months to May 2016, a fall of 110,000 people compared with the same period a year ago.
  • However, the number of over 50s who have been unemployed for over a year has declined at a slower rate than for other age groups over the last 12 months and the share of unemployed workers classed as long-term unemployed remains higher in the over 50s age group. Over this time, the number of workers classed as long-term unemployed:
    • Fell by 13.6% for those aged over 50.
    • Declined by 28.5% for those in the 16-49 age group.
  • Whilst it’s great to see that the overall picture of long term unemployment is starting to look a little less bleak, the analysis suggests that more could be done to help the many over 50s who find themselves out of work and, at an older age, appear to find it more difficult to get back into employment.
  • This is particularly important given that Figure 4 shows that redundancy rates for the over 50s, whilst declining, remain above other age groups in recent years. The over 50s have formed an important source of labour for the public sector and local government - areas that have seen numerous redundancies over the past few years.  
  • Not only are the over 50s finding it harder to get back into work, they continue to be more likely to find themselves made redundant.
  • Figure 1 illustrates that the contribution of the over 50s to the job market has been rising steadily. Over the past five years, the total number of people in employment in the UK has grown by 7.6%, with employment for the over 50s rising faster than for younger workers. Over this time, the number of workers aged:
    • 65 or older has risen from 898,000 in the three months to May 2011 to 1.21 million in the same period of 2016, a very pronounced rise of 34.3% or 308,000 employees.
    • 50-64 has risen from 7.45 million in the three months to May 2011 to 8.53 million in the three months to May 2016, an increase of 14.6% or around 1.1 million employees.
    • 16-49 has increased by 4.0% or 844,000 employees, from 21.12 million to 21.97 million. 
  • The number of workers who are 50 or older has been rising steadily. Five years ago, some 8.34 million UK workers were 50 or older in the three months to May 2011. That figure had risen to 9.74 million between March – May 2016.
  • Figure 2 illustrates that the over 50s’ share of UK employment is continuing to rise. Over the course of the three months to May 2016, we calculate that:
    • 69.3% of all employed people were 49 or younger, down from 69.9% one year previously.
    • 26.9% of all employed people were in the 50-64 age bracket, up from 26.5% one year earlier.
    • 3.8% of all employed people were 65 or older, up from 3.6% 12 months earlier.
  • Employment is not a zero-sum game and the over 50s have not been squeezing young people out of the job market. The number of employed over 50s is far lower than the number of employed 16-49-year-olds. Over March - May 2016, there were 8.53 million employed 50-64-year-olds, versus 8.23 million one year earlier. This compares to 21.97 million employed 16-49-year-olds over March - May 2016, versus 21.72 million over the same period in 2015.

 

Ends

 

 



[1] A person is defined as being long term unemployed if they are unemployed for one year or more.

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