My Lords, I thank the noble Baroness, Lady Turner of Camden, for securing the debate and for her excellent presentation.
We have an ageing population in the country and this puts a huge pressure on state services as well as on the state pension. We need, therefore, to look at ways of relieving this pressure, and enabling older people to work is crucial to achieving this aim. The current model, if left unreformed, will be unsustainable. It is therefore important to encourage people over 65 to remain as an active part of the productive economy. The Work and Pensions Select Committee has estimated that deferring retirement by just two years can ease the situation in regard to the basic state pension by up to 20 per cent.
Work also has an important intrinsic social and cultural value, providing structure to many lives and providing informal support mechanisms. A number of older persons need to keep themselves occupied: this gives them a purpose in life and they attain a great deal of satisfaction and pride by working. The aims of the Government to get us all to work longer are indeed laudable for a variety of socio-economic reasons but, if we look at the reality, there are often disincentives to this.
A cultural shift is required, focusing on three core areas: support and training for middle-aged and older people; removing economic barriers to carrying on working after 65; and ensuring that the workforce is not largely diminished through ill health. Employers should recognise that older workers are experienced and loyal assets to organisations; they provide excellent customer service.
The default retirement age, anti-age discrimination legislation and the retirement age need to be reviewed for the future, but we need a period of radical thinking about what we can do today. The Pensions Commission’s call for lower employer national insurance contributions for those over pensionable age is one such suggestion. Extending flexible working is also key in enabling older people to carry on working while balancing family and other duties.
The level of skills and training in older workers is often below average. A Conservative “all ages careers service” will make apprenticeships available to all and not only the young. It is also scandalous that people of state pension age are not entitled to attend Jobcentre Plus. We need to review this matter.
The economic incentives to work for the poorest pensioners who are receiving pension credit top-ups are minimal. The Work and Pensions Select Committee stated:
“A single pensioner on Guarantee Credit is entitled to £5 per week disregard on their earnings with couples entitled to a £10 disregard”
For many pensioners, it is probably not worth considering taking up work. As the disregard has stayed the same since 1988, I call on the Government to undertake a full-scale review of the earnings disregard.
Finally, I urge employers to take a proactive role towards the health of their workers who are over 50 as some fall ill in middle age and never return to the workplace. I would appreciate an update from the Minister on the progress of the trial of early intervention provision, Fit for Work schemes and the current ongoing work of the National Centre for Working Age Health and Well-being. Barriers to work for older people are a combination of cultural factors, economic disincentives and health concerns. I commend the Government’s efforts thus far but we need a more fundamental review if this plank of policy is going to be realised.