The impact the recession is having on the workforce is clear; many employers have been forced to make redundancies or pay cuts to survive. And there is growing evidence that some workers are being hit particularly hard.
Research by Age Concern and Help the Aged found that a quarter of people aged over 50 thought their age would see them forced out of a job if their employer decided to reduce staff numbers.
These fears are supported by the employment statistics; unemployment among those aged over 50 – which has risen by nearly half in the past 12 months – is rising at a faster rate than among younger age groups. And with older employees also less likely to find another job once out of work, the recession risks creating a lost generation of older workers, locked out of the labour market for good.
Default retirement age
The difficulties faced by older workers are fuelled by the retention of a national default retirement age (DRA), which allows employers to compulsorily retire people when they reach 65. By creating a fixed point at which people can be made to retire, this not only forces people out of their jobs when they are capable and want to carry on working, but it also influences employers’ decisions about their personal development and opportunities in the years leading up to it.
In 2006, the government’s decision to include a DRA in regulations aimed at tackling ageist practices in employment and recruitment looked short-sighted. Fast forward to 2009, and it is looking increasingly out of step with political and public opinion.
A Work and Pensions Select Committee report has condemned the DRA as counter to established government policy. In a survey of UK employers, the Chartered Institute of Personnel and Development found more than 40% wanted it scrapped with immediate effect. And in a survey commissioned by Age Concern and Help the Aged, nearly nine in 10 people aged over 50 said they thought it was unfair to compulsorily retire people because of their age.
Age Concern and Help the Aged are currently challenging the default retirement age, with the case coming before the High Court next week. However, we hope ministers will instead use the new Equality Bill to address the issue. The Bill – which we strongly support – will at last place ageism on the same footing as other forms of discrimination. This will deliver significant benefits to older people – for example by tackling age discrimination in health and social care, and ending arbitrary age-based restrictions on access to financial products.
But it must go further in breaking down the barriers older people face, and ending forced retirement would achieve this. Allowing employers to force people to retire at 65 is completely at odds with the government’s wider aims of extending working lives and promoting a positive vision for our ageing society. Earlier this year, care minister Phil Hope spoke of a ‘grey ceiling’ and the need to tackle hidden attitudes that stop older people from staying at work. The DRA is a highly visible example of how the government is keeping this grey ceiling in place.
It also has far-reaching consequences for both the individuals concerned and society as a whole. There is evidence to show that not enabling people to carry on working when they want to can have a detrimental effect on their health, social networks and financial wellbeing. This also risks leaving society to pick up the bill from increased benefits dependency and medical care and support needs in later life.
The Equality Bill provides ministers with an opportunity to take action on an issue that will make an immediate impact on older people’s lives. With one in seven employers with a default retirement policy threatening to make more vigorous use of forced retirement, it would also help to ensure that this recession, unlike its predecessors, does not create a lost generation of older workers.
By Michelle Mitchell, charity director, Age Concern and Help the Aged
Personnel Today is supporting a campaign to force the government to scrap the DRA. You can sign our petition on the Number 10 website.