08 September 2023
If you are covering the latest statistics from the DWP on the economic labour market status of individuals aged 50 and over, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Despite the government’s efforts to drive economically inactive over 50’s back to work, today’s figures from the Department for Work and Pensions show the employment rate of people age 50 to 64 years notched up by just 0.6% over the last year following drastic falls during the pandemic.
“With the state of the economy fast becoming the number one issue as we head towards the start of election campaigning, the Conservative government has its work cut out to boost productivity and has been pulling out increasingly desperate measures to lure this age group back to work as a result. The Chancellor’s budget earlier this year announced major changes to pensions allowances, with the Money Purchase Annual Allowance increasing from £4,000 to £10,000, for example, making it more worthwhile for those who have already accessed their pension to return to work.
“While the fall in the employment rate has been broken, it appears these incentives alone will not be enough to provide the uplift the government is after. Just this week the government came under fire for its new plans to drive more people claiming sickness benefits back to work through a more stringent assessment process. This morning’s release shows being sick, injured or disabled remains the primary reason for economic inactivity, cited by 42.3% of older inactive adults, so despite the heavy backlash it has faced, it may feel its plans are justified. These plans would not come into force until 2025 so if Labour wins the election, it would have to decide whether to move ahead with the controversial changes.
“The rate of economic inactivity for this age group has also decreased in the last year, falling by 0.8 percentage points from 27.4% in 2022 to 26.6% in 2023. While this is a positive, both this change and the employment rate uplift may solely be due to people being forced to return to work to make ends meet given the higher cost of living as opposed to the government’s efforts. Ultimately, these efforts are not working as had been intended, and the current government is rapidly running out of time to make meaningful change ahead of the election.”
