Britons on a low income in their 50s and 60s are finding it increasingly difficult to earn an living but are unable to access vital pension system support, including the state pension and Pension Credit.
According to the latest Ageing Better report from the Centre for Ageing Better, those approaching retirement age are finding themselves at risk of pensioner poverty and financial insecurity due to old age.
The charity is sounding the alarm that the highest poverty rates for any age group are among people aged between 60 to 64, a quarter of whom are living in poverty.
Employment rates for people aged 50 have stalled in recent years, which is partially due to a rise in the number of individuals who have become economically inactive due to long-term sickness following the Covid-19 pandemic.
While older people with higher incomes are more likely to be on paid leave by choice, those on lower incomes have been forced to leave due to health issues, according to the Centre.
The organisation highlights those who have left the job market in their 50s and 60s remain keen to get back to work but are prevented by various factors, including age discrimination, workplace flexibility and support.
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Steve Webb said Daphne's case provided a 'glimmer of hope' STEVE WEBBGB News spoke to former pensions minister Sir Steve Webb about whether the Government should introduce stricter rules on businesses making people in their 50s and 60s redundant.
According to Sir Steve, who is a partner at LCP, there is a "chasm" between the benefits provided to working-age people and pensioners by the Department for Work and Pensions (DWP).
He cited the example of a couple on Universal Credit being perceived as needing less to live on by the state than one single person on Pension Credit.
Should restrictions be put in place for redundancies of over 60s?
Sir Steve: "I’m not sure restrictions on the ability of employers to make older workers redundant is really the right way to go.
"Whilst it’s not nice for anyone to be redundant you could argue that it’s worse to lay off young people as this could blight their future for decades to come, so I don’t think they are less deserving of any protection.
"There’s also a risk that if employers know they will struggle to get rid of older workers, they may be less likely to take them on in the first place?"
What can be done to help those approaching retirement who have been made redundant?
Sir Steve: "One important thing we can do more of is help people to retrain/change careers etc., so that they are doing jobs in later life that they are qualified to do and which may (for example) be less physically demanding.
"In the past, the assumption was that people would have a single job/career for life, but with the pace of technological change that is increasingly unlikely to be true.
"The concept of the ‘mid life MOT’ is in this spirit where you review not just your financial plans but your career / job plans before change is forced upon you. If this became more mainstream then you’d be more employable in later life so even if you lost one job you would be better placed to find the next, and your skills would be more up-to-date etc."
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PEXELSWhat can Britons in their 50s and 60s do to boost their income if made reundant?
"There aren’t many ‘quick fixes’ for your finances if you lose your job some years before pension age. But there may be some pensions that you could draw earlier but at a reduced rate.
"Although doing this lowers your post-retirement standard of living (because the pension is lower than it would otherwise have been), it could help to bridge the period from redundancy to retirement.
"Similarly, more modern ‘pot of money’ pensions can mostly be drawn down post 55 (or post 57 in a few years’ time) and could be used to tide you over until your state pension etc. kicks in.
"But, as ever, the risk is that you raid your pensions early and then have a very diminished standard of living post-retirement.
