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26 May 2009

Recession threat to older workers and retirement plans

Workers aged 50 plus are facing a recession double whammy: afraid they will be forced out of their jobs due to their age and worried that their retirement incomes will be decimated by the recession, new research from Help the Aged and Age Concern reveals today. 

More than 1 in 4 (28%) over 50s questioned in a recent survey fear that their age will see them forced out of jobs if their employer decides to reduce staff numbers due to the economic downturn (1). Recent figures showing that over the past year the number of unemployed people aged 50 plus has risen by nearly 50 per cent suggest these concerns have become reality for many (2).  

While the nightmare of unemployment looms large for the over 50s, many are also seeing their pension prospects hit hard by the downturn. Nearly half of respondents (47%) said they are less confident than six months ago that their pension and savings will provide them with a comfortable standard of living in retirement. 

This situation means for many, continuing working and retaining earning potential is more important than ever before. A massive 60 per cent of respondents said the recession has meant they will have to or want to work longer than originally planned. Yet, the economic situation and the lack of support available for over 50s who do lose their job will leave many of them permanently out of work and facing a long and difficult retirement. 

Michelle Mitchell, Charity Director for Age Concern and Help the Aged said: 

'These figures paint an extremely bleak picture for millions of over 50s whose working lives are at risk of being cut short by the recession. Those who do lose their jobs will face significant obstacles to getting back into work, leaving them financially vulnerable as they approach retirement. For many over 50s, one of the lasting legacies of this recession will be a retirement blighted by poverty. 

'During this difficult time, we are urging employers to start seeing beyond job applicants’ age and look at the skills, experience and commitment older workers have to offer. The Government must also play their part by providing a tailored package of support for over 50s who do lose their jobs – this is currently almost non-existent.' 

The charity is today calling on Government to commit to a three point plan to help 50 plus workers through the recession, listed below. 

1. Scrap the senseless National Default Retirement Age which forces people to retire at 65    and allow people to continue working as long as they want or need to while they are able to do a good job. 

2. Provide financial incentives to employers who take on 50 plus workers who have been out of work for more than 6 months.

3. Provide a tailored package of support for unemployed over 50s, including specialised training for JobCentre Plus staff to recognise the specific needs of older people job searching and providing them with meaningful, holistic support.

The Age and Employment Network (TAEN), a strategic partner of Age Concern and Help the Aged, offers an information service for individuals looking for employment or who want to change direction, develop their careers or undertake training. They can provide help and signpost people to relevant organisations and a number of useful resources. Contact TAEN on 0207 843 1590 or go to www.taen.org.uk  

Notes to editors:

Contact:
Stefano Gelmini, Age Concern and Help the Aged press office,
020 8765 7514 or out of hours 07071243243

1. ICM interviewed a random sample of 2007 adults in GB aged 18+ by telephone between 24th-30th April 2009. Q4-12 based on a sample size of 943 of respondents aged 50+ only. Surveys were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.co.uk

2. Most recent ONS figures (12.05.09) show that over the past year unemployment among people aged 50 plus has risen by 47 per cent.

3. Unemployed men aged 50+ only have a one in five chance of being in work two years later. The chance of older men finding future employment falls by a quarter for each year they are out of work.

4. Open market annuity rates have fallen by around 10% since summer 2008. Small funds receive worse value because rates are lower, competition is weaker and the return from shopping around is lower (Age Concern research).

5. TAEN – The Age and Employment Network is a leading national network of over 200 member organisations committed to creating an effective job market which works for people in mid and later life, for employers and for the economy. TAEN champions the contribution that age diversity in employment makes to business success and a healthy society. 

6. Age Concern England and Help the Aged have joined together to form a single charity dedicated to improving the lives of older people.