‘Encourage mothers in low-income families into work’, says think tank
Government efforts should move away from persuading the large COVID cohort of older workers to "unretire", but instead focus on supporting more mothers into work, according to a think tank.
Britain has been struggling with workforce participation following the pandemic and a major plan to get the economy firing on all cylinders is to persuade this recent "COVID cohort" of lost workers back into the labour market.
Over 830,000 left work during the pandemic, with three quarters of the rise concentrated among those aged 50 and over.
The Resolution Foundation said that the government should forget about "unretiring" these workers and focus on supporting more mothers into work, and helping older workers and those with a disability stay in work.
Increased labour market exits during the pandemic were disproportionately from higher-than-normal retirements among higher-paid professionals, with flows from employment into retirement from many low-paying occupations actually falling, a report from the think tank identified.
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It will be hard to persuade these people, two-thirds of whom own their own home outright and therefore have low living costs, to "unretire" the Resolution Foundation said.
“We need to reboot progress on getting people into work, but we’re not going to achieve it by persuading the recent COVID cohort of older workers to ‘unretire’”, Louise Murphy, economist at the Resolution Foundation, said.
“Instead, we need to do more to encourage mothers in low-income families into work, and help people who need to take periods of time-off for ill-health stay attached to their jobs.
“Taking the right approach to workforce participation would boost individuals’ living standards, and improve the wider health of our economy.”
The Resolution Foundation highlighted that someone who took early retirement during the summer of 2020 has now been economically inactive for two-and-a-half years. Historically, just one in 50 people in this situation return to work every three months.
The think tank is urging the government to instead look ahead and focus on three groups: older workers, mothers and those with ill-health or a disability.
Read more: London has highest levels of working from home
In the decade running up to the pandemic, the UK saw employment rates rise by 13 percentage points for women aged 55-64 (and four percentage points for men) and by five percentage points for coupled mothers, while the employment gap between those with and without a disability fell by five percentage points between 2013 and 2022.
“The government should build on the success of statutory maternity leave in boosting maternal employment, and create a new ‘right-to-return’ so that workers who need take some time off work for ill-health remain attached to their employer and job,” the report said.
“The Foundation also warns that proposals from both main parties to reform disability benefits to ease the path back into work are well intentioned, but either relatively minor or fraught with implementation challenges.”
The Resolution Foundation also warned against a “narrow focus” on simply raising the state pension age, which “disproportionately” impacts those on lower incomes and poor places with lower life expectancies.
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