An unemployment tsunami is heading for older workers

The over-50s are facing a rise in unemployment and shrinking opportunities, says James Moore – a grim warning to younger generations that loyalty and experience may no longer count for much in today’s job market

The latest labour market data from the Office for National Statistics delivered a familiar array of nasties: unemployment up, vacancies down.

As ever, it is those most vulnerable to the axe, and the lack of opportunities in the aftermath of said axe falling, who suffer the most when the labour market “tightens”. A “tightening” labour market is economist-speak for when it gets colder than the ready meal left in the freezer for the last three years for those looking for work.

Figures from the Department for Work and Pensions (DWP), meanwhile, show this delivering a hard slap to older workers. The employment rate among people aged 50 to 64 years stands at 71.6 per cent, which is still below its pre-pandemic level. The employment rate gap between people aged 35 to 49 years and those aged 50 to 64 years stands at 14.1 per cent, little changed over the last year but uncomfortably high nonetheless. Here’s the real stinger: the unemployment rate for those aged 50 to 64 has increased from 2.4 per cent to 3.1 per cent in the last year.

Unemployment rate for those aged 50 to 64 has increased from 2.4 per cent to 3.1 per cent in the last year (Alamy/PA)

Who are these people? I suspect a significant number of them have become so disheartened by the state of the labour market that they’ve given up seeking work. What are their lives like? It’s enough to make you shudder.

A friend of mine found themselves embarking on a long and dispiriting slog after being booted out of the City. They were highly qualified, had bags of experience, transferable skills, and positive reviews from colleagues. None of it helped – and for a long time. Their search mercifully ended happily, much more so than the executive recently featured in the Daily Mail. He traded a six-figure salary for £12.50 an hour after unsuccessfully applying for more than 50 roles. His wife wrote of the “brutal impact” on their marriage – a “passion-killer” that deleteriously impacted the man’s mental health.

Older workers tend to find themselves shuffling uncomfortably in the spotlight when CEOs and finance directors decide that it’s time for a round of cost-cutting to pad their bonuses. They tend to be first in line for the chop because they are expensive. Their bosses know the cost of everything. Do they understand the concept of value? I’m not so sure.

If you burn through this cohort, who will be there to train and/or mentor younger members of staff for you? Or just to provide a shoulder to cry on when the boss is being an ass? Don’t underestimate how important that can be. I’ve been there. It was often the greybeards in the office who took us to the pub, bought the drinks, and offered words of encouragement when the boss had behaved badly.

Some employers see the issue better than others. Rest Less, a website for the over-50s, highlights a diverse range of companies including Aviva, Boots, B&Q, National Express, Atos, Next, Sainsbury’s and Starling Bank. However, there is still work to be done, including by government. It would very much like people to work for longer, and they need to because it has been increasing the retirement age as a (partial) means of addressing the ruinous cost of the “triple lock” that sees the state pension rising by inflation, average earnings or 2.5 per cent, whichever is higher.

The result is that the retirement age, now 66 for men and women, will increase to 67 between 2026 and 2028, and then to 68 between 2044 and 2046. I’d put good money on 68 coming a lot sooner. The lock – which has become a political sacred cow – is sucking resources from other departments. It’s an economic carbuncle that ministers daren’t touch for fear of the reaction.

Zoomers: if you don’t think this is a problem for you, believe me, it will become one. Consider this: the average age at which people buy their first home has been increasing. It now sits at 33, according to trade body UK Finance. The terms of mortgages have similarly been on the rise to help buyers cope with the sky-high cost of housing. They used to run for 25 years. Terms of 30–35 years are now quite common.

This means people are still going to be saddled with mortgage debt into their late sixties, maybe even their seventies (remember, 33 is an average, so many first-time buyers will be significantly older than that).

The cost of a home loan should – should – get more manageable over time. But what if you find yourself without an income, and with little chance of changing that? See where this is going? Pictures of homeless elderly people who’ve had their homes repossessed are not what any government wants to see. But they’re coming.