Government boost for older workers

Ross Wigham speaks to pensions minister Malcolm Wicks about encouraging the
employment of older staff

Q Does the Government want people to work beyond the traditional
retirement age?

A We don’t want them to – we want to give people a choice about when
they retire. We all have different aspirations but suddenly because you’re 65
you don’t become less valuable to an organisation. It’s about giving choice and
trying to throw out the idea that once you reach a certain age you’re only fit
for retirement.

Q What factors are making people want to work beyond retirement age?

A More people are able to exercise more choices because there are
more options. As long as staff are able to do the job well, employers should be
flexible. Some older people are saying they enjoy their job and want to
continue doing it.

Q What are the challenges to working beyond traditional retirement age?

A The real challenge is confronting this demographic paradox of an
ageing population, but a simultaneous growth in ageism. Proposals to outlaw age
discrimination are right because I believe it can be as devastating as racial
or sexual discrimination.

Q What is the Government doing to promote older workers?

A We have the Age Positive Campaign which is appealing to firms’
better instincts and also their business instincts. What are some businesses
playing at when the customer base is getting older and yet they only employ
people from a certain section of the workforce? It doesn’t make any business
sense. There are some good examples of those who mostly employ older workers,
not out of any benevolence, but because it makes good business sense.

We’ve gone through a period when lots of people have been thrown out of work
in their 50s. Some of that was about industrial change, but some of it was
staff being made redundant from office jobs and struggling to find new work.

The good news is that the employment rate of people aged between 50 and
state pension age has increased from 64.7 per cent in 1997 to 70.1 per cent in
2003, so things are moving in the right direction. That 70 per cent is much
higher than other European countries, but we want to increase it further.

We need a debate about the nature of work in later life. I don’t think
people necessarily have to stay in the same job, or even the same type of job.

Q Are employers doing enough?

A I don’t think employers are doing enough, although there are a few
frontrunners showing the way. My own view is that outlawing age discrimination
will send out a very strong signal that this cannot be tolerated.

My guess is that the most powerful driver in this will be full employment
because companies will need to fill vacancies. The challenge of filling
vacancies is good news for social inclusion because it means employers will
become more grown-up about employing older workers, ethnic minorities and
disabled people.

Q What should employers be doing?

A Employers should be challenging HR departments to get rid of
unhelpful stereotypes of older workers, and asking questions about how the
business can open up to the issue.

Q Should tax breaks or cash incentives be introduced for older workers?

A In general terms, no. We have the New Deal for the over 50s, which
gives some financial inducements, but, that aside, I don’t think it’s a good
approach. It’s more about attitudes and we need to get rid of some of the
outdated views.

We’ve got to concentrate on lifelong learning so employees can be ahead of
the game on skills and knowledge. They need to be able to re-skill and re-equip
regardless of age. That in itself means challenging another stereotype that
people can’t develop new skills after a certain age.

Q Will pension provisions change to reflect the UK’s demographic changes?

A There’s a whole range of factors affecting pensions at the moment,
and the Pensions Bill will try and bring more security into schemes. There’s a
huge issue around making people take pensions more seriously at an earlier age.

We do have to get away from the idea that on a certain day, at a certain
age, we automatically leave the workplace. We plan to make it easier for
employees that want to stay on at work earning a salary, but drawing a pension
as well. We need to enable people to stay in work and have good options.

Q Are you worried about the number of companies closing the final salary
scheme?

A What we are worried about is those employers who, when switching
from final salary to other pension arrangements, cut the employers contribution
– that is a concern.

Q Is the whole notion of the existing pension system dead?

A The whole pensions agenda is becoming very important, and in parts
of Europe, people are marching through the streets in demonstration because
they are so concerned. It’s a hot political, social and employment issue and I
can only see it growing in importance.

I think this is because the life cycle has changed hugely. Previous
generations had a life focused on work that started at the age of 14 and ended
once you dropped.

We’ve only had the idea of retirement for the past 100 years. The great bulk
of life was about working but now it’s more about preparing for work through
education and training. Work only fills a small part of our lifetime so we have
to look at how we fund the education and retirement periods.

We have to get more contributions into schemes and we’ve got to drag some
people and employers to that realisation.

Q How will pensions change in the future?

A Increasingly, when people are thinking about career moves they will
have to put training and pension provision at the top of the list, not just the
usual things like wages and leave.

From an employers point of view, pensions will become so much more important
to the overall package they offer to potential candidates.

If we can get more employers to put pension contributions on pay slips and
get more jobs to be advertised with the pensions package, then we will start to
make Britain a more pension literate country.

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