UK government looks to lure early retirees back to work, reports say

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Plans to coax middle-aged retirees back into work to boost the economy are being considered by the government, according to reports.

Older people who have given up work could be offered what is being described as a “midlife MOT” to entice them back into employment, the Times has reported.

The paper says the MOT would assess finances and opportunities for various types of work.

The plan is part of a broader agenda by Rishi Sunak to tackle some of the fundamental problems facing the UK, and it follows a recent House of Lords committee finding that a wave of early retirement for professionals aged over 50 since the Covid pandemic has caused a huge labour shortage.

It is believed many decided to take early retirement on the basis of assumptions made before the cost of living crisis.

The report, by the economic affairs committee, examined the jump in economic inactivity – the number of people not in work or looking for work – and rising vacancies since 2020.

According to government estimates, about 630,000 people have left the workforce since 2019, with employment figures still not back to where they were before the pandemic began in early 2020.

The report also noted that retirement, increased sickness, changes to migration and the UK’s ageing population had all contributed to the current tightness in the labour market.

Figures from October revealed that nearly 2.5 million people were not looking for jobs because of long-term sickness, adding to the labour shortages.

The hope is that the MOT will also help identify opportunities for part-time or flexible work, mentoring and skills training.

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The measures are part of a wider government initiative, due to be launched in the new year, that intends to reduce the nearly 9 million adults of working age who are economically inactive.

Government sources said the plan was a priority for Sunak and the chancellor, Jeremy Hunt, to counter reports that the economy is being dragged down by low employment rates and a high level of long-term sickness, which accounted for 28% of all those out of the labour market in June to August, compared with 15% at the start of the pandemic.

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Last month, Hunt asked Mel Stride, the work and pensions secretary, to conduct an assessment of the barriers and incentives to work. This research found that 60% of people who had left their jobs since the start of the pandemic would consider returning.

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Stride is keen to examine the possibility of a government “pairing” scheme in which older workers provide support and advice to small and medium-sized businesses. He also wants to explore volunteering schemes for retired people who have no financial need to work but might be willing to give up some time for worthwhile causes.

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The head of John Lewis, Dame Sharon White, said in August that the 1 million mostly over-50s who left their jobs during the pandemic should be encouraged back to work to tackle the labour shortage that is pushing up inflation and wages.

“We now have 1 million fewer people in work,” said White, the chair of John Lewis Partnership. “Some think about it as the ‘great resignation’. I think about it as the ‘life reappraisal’ because this is predominantly people in their 50s.”

The Times quoted a government source who said that if older workers could be persuaded to return to work, even part-time, it could have a significant impact and help the UK recover from recession.

Sunak would also reportedly be looking to take further action to reduce NHS waiting times, examine education changes, and maintain focus on immigration.

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