Author Archives: Christopher Brooks

Pension reforms – opportunity and risk

 

Pound coins - Photo: Flickr user hitthatswitch

Photo credit: hitthatswitch, Flickr Creative Commons 

April 2015 will represent a landmark day for pensions, with an end to the requirement to use a pensions ‘pot’ to buy an annuity. For better or for worse, people at point of retirement will hold their own futures in their hands, with decisions taken at this time having implications that can be felt for many years to come.

Age UK has welcomed greater flexibility, but it’s clear that the rapid speed of change has led to significant challenges ahead for the government and the industry, as well as – most importantly – ordinary pension savers.

Disengaged savers

Age UK recently published an independently-written report, Dashboards and Jam-jars, which looked at some of the main issues facing people with average-sized pension pots. It highlighted some of the main problems that could arise – for example paying too much tax or running out of money – and suggests what can be done to mitigate these. Continue reading

Are people really ‘over-saving’ for retirement?

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Defining what makes an ‘adequate’ retirement income is always going to be tricky. It’s inherently difficult to know exactly what people’s spending choices and needs are likely to be, or how they will adjust to stopping work.

Add in the changing nature of retirement, where increasing numbers of people are working past their State Pension age, it becomes even harder.

New paper, new ideas?

The Institute for Fiscal Studies (IFS) recently published a paper investigating a new method of looking at retirement incomes. It identifies an ‘optimum’ level of pension saving for each couple household. Instead of income band, this is based on a range of personal circumstances (e.g. number of children) and an
assessment of spending patterns. It then evaluates whether people have saved below, at, above or the ‘optimal’ level required to achieve a comparable standard of living for their retirement. Continue reading

An older worker, but just as productive

Older worker

If you want to raise a few eyebrows, there’s nothing like busting a stereotype.

Older workers are perceived in many (usually negative) ways, and such stereotypes are often deeply ingrained with the nation’s psyche. However it’s often unfair to apply them to the majority of people, which is why it’s important we challenge them.

This blog dissects just one: that as people age, their health gets worse and cognitive ability declines making them less productive in the workplace.

Our new briefing, which draws its conclusions based on a wide range of research evidence, explains in detail why this view in incorrect.

Continue reading

Making the Work Programme work for older jobseekers

It has been widely reported that that the Government’s flagship back-to-work scheme, the Work Programme, was failing to help the unemployed back into work and was accused by the Labour Party of being ‘worse than doing nothing’. While we don’t agree with this view, it’s clear the Programme has had some teething problems, particularly for the over 55s involved.

To quickly re-cap, the Work Programme is a major policy costing between £3 and £5 billion over five years, aimed primarily at the long-term unemployed. It uses private companies (‘contractors’) to help people return to work. And to clarify a common misunderstanding, it is not the same as the different but much talked about scheme where jobseekers do unpaid work experience at a business or other organisation!

NOT WORKING FOR OLDER JOBSEEKERS

Age UK has now had a detailed look at the results by age group to find out how successful it was for older jobseekers and  published a briefing.

While the Work Programme came in below expectations for everyone, it is even worse for the over 55s (see chart below. This shows the proportion of people sent on to the Work Programme who entered and remained in a job for at least three months).

The over-55s suffer a drop in successful job outcomes of nearly 30 per cent compared to the average for the under-55s (interestingly, the 50-54 age group have the same outcomes as 45-49s). The age profile of the job success rate is shown below.

This is a huge shortfall and represents a huge problem because the Work Programme appears to be failing to tackle the barriers faced by older jobseekers – it is simply not offering sufficient support.

job-outcome-chart

OVER 55s STRUGGLING TO FIND WORK

For anyone who loses their job once over the age of 50, it can be very difficult to move back into work. So it would be expected that the Work Programme would be less successful for older jobseekers, right? Well yes, and no.

Because the Work Programme is a labour market tool designed to improve job outcomes, it’s possible to change how it operates. Doing so could correct the natural imbalances found within the labour market which almost always harm the prospects of disadvantaged groups, including older jobseekers.

Our briefingrecommends several ways of changing the Work Programme without hampering contractors’ freedom to operate as they choose.
This could be by paying contractors more to place over 55s into jobs or by moving people to the Work Programme after six months unemployment rather than 12 – giving the right support earlier can help, although ‘right’ is the key word here. Measures such as these could make all the difference.

But it seems clear that if nothing changes, older jobseekers will continue to find themselves cut out of the workforce, often permanently, while being expected to wait longer before being able to draw their state pension.

Read  the full Age UK briefing ‘The Work Programme and older jobseekers’

Find out more about Work and Learning on the Age UK website