The coronavirus pandemic has led to the biggest annual employment drop for employees over the age of 50 since the 1980s, according to a new report.
New research by the Resolution Foundation and Nuffield Foundation examining the economic impact of the COVID pandemic highlighted the effects on older workers and how periods of unemployment can hinder their return to work.
According to the study, published on Monday, the pandemic has created a "U-shaped" employment shock, which impacted older and younger workers more than those in the middle of the age distribution.
While the 16-24-year-olds saw the biggest dip in work in the past year — 3.9 percentage points — the fall in employment among those between 50-to-69 has been twice as large as those aged 25-to-49 (1.4 compared to 0.7 percentage points).
The U-Shaped Crisis report notes that the cost of losing a job can be particularly high for older workers.
On average, older staff take the longest to return to employment, Resolution Foundation said.
"The cost of unemployment for older workers is particularly high. They take the longest to return to work – with fewer than two-in-three returning within six months – and experience the biggest earnings fall when they finally to return to work," said Nye Cominetti, senior economist at the Resolution Foundation.
Six months after becoming unemployed, nearly three-quarters of 16-29-year-olds and 30-49-year-olds (74% and 72% respectively) had returned to employment, compared with 62% of those aged over 50.
It said, when people over 50 return to work following a period of unemployment, they face the highest income hit of all age groups, with typical hourly earnings falling by 9.5%, in comparison to their pre-unemployment earnings.
This reduced to a 4% earnings hit for those aged between 25-49, while typical pay growth remains strongly positive (5.1%) for young workers (aged 18-24) returning to work.
Highlighting the impact on retirement, the foundation said unemployment amid the pandemic can potentially have a big impact on older workers’ plans, says the Foundation.
It said this could force some to retire earlier than they planned, thereby reducing their income in retirement, or forcing them to work longer to make up for lost earnings.
Alex Beer, welfare programme head at the Nuffield Foundation said: "The economic downturn following the COVID-19 pandemic is likely to widen existing inequalities and will hit some groups harder than others. As this research shows, along with young adults, workers over 50 have been particularly likely to lose their jobs during the crisis."
He called on the government to "offer tailored support" to older employees, including retraining opportunities, "adequate" help to find new jobs and "greater rights to flexible working" for all workers.
The report follows separate data from the Office for National Statistics (ONS) showed over half of people who dropped off the UK payroll in the last year were under 25. While 80% were under the age of 35.
According to the ONS figures released last week, 813,000 jobs disappeared from the UK payroll since March 2020. 436,000 (53.7%) of the roles were done by people under the age of 25.
The number of under-25s on the payroll has now hit just 3.4m, which youth charity Impetus said was a record low.
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