Universal Credit: a missed opportunity to help older workers

We know that many people want to work into older age – yet many do not. So what stops them? For some, caring for family or friends can make paid work near impossible. For others, their own poor health can be a barrier. And for families on low incomes, it may be that work simply doesn’t pay enough to warrant continuing. This can lead to trouble for families who don’t have the savings they need to maintain decent living standards into retirement.

Universal Credit (UC), the government’s flagship welfare reform, could address some of these barriers. For example, under UC low income households will receive an income boost designed to make work pay. This system could be powerful in ensuring older people have the incentives they need to remain in work. Yet a new report from the Resolution Foundation shows that while UC offers some benefits to older workers, it also misses an opportunity to raise older people’s incentives to stay in a job, or return to work. Without these incentives, low paid work simply does not add up.

There are alternatives. Some minor changes would mean the system boosts work incentives without punishing those who cannot work. (For example, the income disregards – the amount of income that is invisible to the UC means-test – could be higher for older people.) Yet so far we have seen no indication that government will improve the system before implementation.

It’s not all bad. In fact, there are many beneficial aspects to UC. The system is simpler, more flexible and encourages pension savings. However, as it is the new system fails to respond to the particular needs of older people and this is a shortcoming that cannot be ignored. One in three people of working age in the UK is already over 50. But we fare badly when it comes to supporting older people to find or stay in work. In fact, the UK would add another 1.5 million workers if it matched the older employment rates of other advanced economies by supporting those older people who want to work to do so. Without addressing the particular position of older workers, UC is yesterday’s policy, failing to meet today’s challenges or anticipate tomorrow’s.

This post originally appeared on the Age UK blog