• New data from the ONS reveals how older workers have been affected by the pandemic (https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/livinglonger/olderworkersduringthecovid19pandemic)
• While Coronavirus has hit the job prospects of younger workers the most, 1.3 million people on furlough are aged 50 or over
• Furthermore, 3 in 10 workers aged 50 or over on furlough believe there is a 50% chance or higher they will lose their job once the scheme comes to an end
• Government must rethink policy which punishes those who access taxable income from their pension with a £36,000 annual allowance cut
Tom Selby, senior analyst at AJ Bell, comments: “The Coronavirus pandemic has caused colossal damage to the job prospects of people of all ages.
“While it is the young who have suffered the most in this regard, older workers have also been in the firing line, with a quarter of those on furlough – representing 1.3 million people – aged 50 or over.
“Furthermore, a significant proportion of these people fear they will lose their jobs once the furlough scheme has been pulled back.
“Although the impact of the pandemic will have been varied depending on a range of factors, some of the most common areas of the economy employing over-50s - including motor vehicle repair, construction, education and health and social work – have been the hardest hit.
“People over 50 also tend to be more likely to be self-employed, a part of the labour market which has been ravaged by Coronavirus. More broadly both employment levels and hours worked among older people have also fallen, meaning there are now 193,000 fewer people aged 50 or over employed in the UK as a result of the pandemic.”
The case for interventions to help over-50s
“All of this points to the Government needing to target help at both younger and older workers who have been so badly impacted by the pandemic.
“An obvious starting point would be to revisit the money purchase annual allowance (MPAA). With over-50s facing severe income pressure, many will inevitably turn to their pension to help make ends meet.
“In this context, slashing the amount they can save each year for retirement from £40,000 to just £4,000 feels grossly unfair. It also increases the risk of these people falling back on the state in later life, an outcome which is clearly not in the interests of anyone.
“At the very least, policymakers should look at increasing the MPAA back to £10,000 – the level it was first introduced at. However, it would be preferable if the measure was simply scrapped altogether.”
