Martin Lewis warns of redundancies due to furlough policy
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Joblessness among over-50s has soared by 195 percent in a year – higher than any other age group. Around 1.3 million are thought to be still furloughed, but experts fear a second redundancy spike when bosses are made to contribute more to the state-sponsored scheme in July and when it ends in September.
Stuart Lewis, of over-50s digital community Rest Less, said: “While there are plenty of reasons to be optimistic about the economy starting to open up, it’s clear businesses are far from out of the woods.
“While the extra extension to the furlough scheme has stemmed the flow of redundancies for now, jobless rates among the over-50s remain stubbornly high and are the highest of all age groups.
“There is a very real danger of a tsunami of redundancies among workers in their 50s and 60s when struggling employers are required to increase their contribution to the furlough scheme from July.
“Large-scale, long-term unemployment of this talented section of the population risks removing the engine room of growth for the entire UK economy.”
Office for National Statistics data shows 107,000 over-50s lost their jobs between November and January – an increase of more than 70,500, or 195 percent, year-on-year.
UK jobless levels have fallen from their peak, but it has been slowest among the over-50s, who currently have a redundancy rate of 12.8 per 1,000 workers.
Analysis by Rest Less shows redundancies hit a pandemic peak of 395,000 between September and November. Levels have dropped by 22 percent since, but are falling more slowly among older workers.
The taxpayer-subsidised Job Retention Scheme, which ends on September 30, covers up to 80 percent of an employee’s salary for the hours they cannot work, up to a maximum of £2,500 a month.
As Covid curbs begin to ease, bosses, who already have to pay pension and National Insurance contributions, will have to help cover the cost of furloughed workers’ salaries.
From July, the Government will contribute 70 percent of their wages and bosses 10 percent. In August and September, the Government will pay 60 per cent and employers 20 percent.
Furlough has already cost taxpayers £50billion and unemployment now stands at 5.1 percent. But those in their 50s or 60s are more likely to remain jobless for longer. Kim Chaplain of the Centre for Ageing Better said: “These figures show just how devastating the impact of the pandemic has been on over-50s.
“We risk seeing many of these people leaving the workforce for good.”
She added: “In the months ahead it’s vital we build back a multi-generational workforce. Our economy needs both the direct contribution of experienced older workers and the support they provide to other, less experienced groups.
“We need to see targeted employment support and a strong message that not only is this group just as entitled to work as younger workers, they also provide a valuable contribution we cannot afford to lose.”
A Government spokesman said: “Older workers are a huge asset and heading into the pandemic we saw record numbers in employment. We’re already helping many back into work through our Plan for Jobs and our refreshed 50 Plus: Choices Offer.”
Comment by Stuart Lewis
There is no question young people have been hit hardest in terms of the sheer fall in employment levels over the past year as a result of the pandemic.
However, we are increasingly concerned that talented workers in their 50s and 60s will be left bearing the long-term scars.
Our analysis shows employment levels for the under-25s are down nine per cent this year, based on latest ONS figures.
Jobless levels are up 15 percent.
The Government’s Kickstart Scheme will contribute to helping more young people find work and training opportunities as the months go on.
In the meantime, unemployment levels among the over-50s have risen dramatically.
There are an estimated 629,000 over-50s currently claiming Jobseekers’ Allowance or out-of-work Universal Credit. This is a number more than double that of this time last year.
Beneath the headline statistics, there are two areas of real concern.
First is the estimated nearly 1.3 million over-50s still on furlough.
When the scheme starts requiring a greater contribution from employers in July and finally draws to a close in September, it is likely we will see a second spike in redundancies and many become jobless.
Secondly, when someone in their 50s or 60s loses their job, they are much more likely to remain unemployed for longer than younger age groups. Our analysis in January this year showed the over-50s were two-and-a-half times as likely as other age groups to be unemployed for at least two years.
This is of particular concern when set against the backdrop of a rising state pension age, with the Government making it clear people are now required to work until they are 66 before accessing the pension safety net.
The reality is intergenerational teams are good for both employee morale and good for business. Rather than pitting generations against one another we need to be creating a working environment and economic recovery that works for people of all ages.
For progressive employers looking to benefit from building a diverse and inclusive workforce, age diversity and age inclusivity has to be a core part of their workforce planning toolkit for the future.
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