Living and working longer - what you need to know as an employer

08 July 2014

We all know that people in the UK are living longer. The Office of National statistics has estimated that 465,500 people were aged 90 or above in 2012 (33% higher when compared to the previous decade) and that 1 in 3 children born today will live to 100. This longevity has not gone unnoticed by the government in its approach to employment policy:

  • the abolishment of the default retirement age
  • auto-enrolment in workplace pensions; and
  • the extension of the right to request flexible working

are all underpinned by the fact we're living - and working - longer than ever before.

In June this year, the Department of Work and Pensions (DWP) published the paper "Fuller Working Lives - A Framework for Action" which directly addresses the issue of ageing in the context of the workplace. The aim of the paper is to shift the conversation about extended working life from one that is focused around 'working until you drop' to one about working longer to enable you to create the future you want.

The evidence for such a shift in focus is compelling - more than half of men and women have already stopped working before they reach State Pension Age, while 2.9 million people aged over the State Pension Age of 50 are out of work according to a DWP analysis. Yet of this 2.9 million, only 24% see themselves as retired, and are likely to be out of work due to influences such as health conditions, caring responsibilities and redundancy.

One of the key issues identified in the DWP paper is the potential decline in financial security and living standards that results from older workers exiting the labour market prematurely - in terms of retirement savings, the longer people work, the longer they pay into a pension and the bigger their pension pot is at the end of it (the case study makes this very stark!).

In addition, the report highlights the fact that working longer can also improve social interaction and mental wellbeing, a point supported by AGE UK's current drive to help end loneliness for older people out of work, citing it as one of the major problems faced by older people today.

The report rebuts the idea that having more older workers (generally taken to be those over 50 in the report) means fewer opportunities for younger people. Youth unemployment is still a relevant issue for the government. It is clear they need to tread carefully in their initiatives to support workers at both ends of the age scale and avoid fuelling what some have dubbed 'inter-generational warfare'.

Fuller Working Lives suggests that an increase in older workers will actually have a positive impact on economic output, which in turn will help create more jobs and opportunities for workers of all ages. Age UK recently published an article stating that older people contribute £61bn to the economy, £37bn of which comes from employment. Losing older workers also means losing experienced workers from the workplace with highly developed skill sets, running a risk of the loss of 'corporate memory'.

So having recognised the issues and concerns, what is the government proposing to do, and what will this mean for employers? The paper highlights a wealth of current measures and proposed future actions.

A prominent and recent change to legislation has been to extend the right to request flexible working to all employees with 26 weeks' qualifying service. This will potentially allow older employees to work to a pattern that suits them better in later life, allowing them to work to an older age but for fewer hours, or to work and meet caring responsibilities, for example.

In addition, the Care Act has set out new rights for Carers, the abolishment of the default retirement age has removed a significant barrier to people being able to remain in work, and increased funding to help adults retrain is aimed at combatting the lack of confidence older people appear to have in their current skill set.

Future government proposals employers should look out for include:

  • a new guidance toolkit to help employers support older workers - the government states it will build on the existing Age Positive Employer guidance to develop additional accredited guidance and toolkits where gaps have been identified;
  • a general communication from a new proposed governing body to help implement and review the measures outlined in the report;
  • an Older Workers' Champion to be appointed to help communicate the benefits of working longer to businesses and the public.This perhaps mirrors the Australian Government's appointment of an Age Discrimination Commissioner in 2011, who has been working with the UN on raising the profile of older workers and regularly promotes the value of older workers with businesses both in Australia and internationally; and
  • increased focus and support for both Carers, and for older benefit claimants who want to get back to work.

In addition to specific measures, employers should be aware of the underlying message throughout the paper that a shift in cultural attitudes towards older workers is key.

Confidence in older people seeking work is hampered by real or perceived age discrimination issues in the recruitment process. Organisations such as the newly formed Centre for Ageing Better are liaising with the government and employers to help change negative views of older workers in the labour market and stress the value older workers can bring to a business. Apart from taking care to avoid an age discrimination claim, the report should help HR managers who want to build the "business case" for supporting older workers, with numerous positive case study examples.

The impact of the Fuller Working Lives paper, and the success of the initiatives it outlines remain to be seen, but one thing is clear: the momentum in terms of the government's focus on older workers is growing, and businesses are likely to be increasingly impacted either directly or indirectly by that fact. Being aware of and leading the charge in this area is likely to help businesses stand out as employers of choice, as well as allowing them to factor in time and resource for reviews of their own internal HR and training needs in this area.

It really is: ALL ABOUT AGE!

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This article was originally published on Thomas Reuters.


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