The Covid pandemic has caused the biggest annual employment fall for the over-50s in four decades, according to new findings.
A report from the Resolution Foundation has found that, after almost consistent employment growth for older workers since the mid-1990s, since the start of the pandemic employment among workers aged 50 to 69 dropped 1.4 percentage points.
This was nearly double the drop seen among those aged 25 to 49, where the employment rate fell just 0.7 percentage points.
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Only the youngest workers, aged between 16 and 24, saw a higher fall in their employment rate of 3.9 percentage points.
The report, which was supported by the Nuffield Foundation, also found older workers took the longest to return to work after a period of unemployment.
Six months after becoming unemployed, just 62 per cent of those aged over 50 had returned to work. This is compared to 74 per cent of 16 to 29-year-olds, and 72 per cent of 30 to 49-year-olds.
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This older age group also faces the largest hit to its income when it does return to work after unemployment, with hourly earnings for those over the age of 50 falling an average of 9.5 per cent compared to their previous earnings. This compared to a 4 per cent drop in earnings among 25 to 49-year-olds.
The Resolution Foundation warned that unemployment could be affecting many older workers’ retirement plans. Nye Cominetti, senior economist at the think tank, said: “The cost of unemployment for older workers is particularly high. They take the longest to return to work – with fewer than two in three returning within six months – and experience the biggest earnings fall when they finally return to work.”
“In the face of the current crisis, unemployed older workers may have to either work for longer to make up for these negative employment effects, or retire earlier than they planned to,” Cominetti said, calling on the government not to forget this age group when putting together packages to help people back to work.
Alex Beer, welfare programme head at the Nuffield Foundation, warned that the economic downturn following the pandemic was likely to widen existing inequalities. “As this research shows, along with young adults, workers over 50 have been particularly likely to lose their jobs during the crisis,” he said.
“We urge the government to offer tailored support to older workers, including opportunities to retrain, adequate support to find new jobs and, for all workers, greater rights to flexible working.”
Emily Andrews, senior evidence manager at the Centre for Ageing Better, also cautioned that the pandemic could cause people to drop out of the labour market early. “Working life does not stop at 55,” she said. “As this recession unfolds, we need a strong message from the government and employers that older workers have just as much right to a job as younger ones.
“It's also important to remember that when the furlough scheme ends, many employees may not have worked for 18 months or more – and whether they are facing job losses, a change of industry or a return to work, many will need flexible retraining opportunities.”