Market News
Economy faces ‘midlife crisis’ as benefit claimants hit new high - CITY.A.M
The economy faces a “midlife crisis” after a fresh study revealed the number of jobless benefit claimants aged 50 or older has reached nearly two million for the first time.
A new report from the Centre for Social Justice (CSJ) has shown the number of 50 to 64-year-olds who are out of work and claiming benefits has surged by 600,000 to 1.99 million since February 2020.
The research showed a 21 per cent uptick since 2015 in older individuals exiting the workforce due to health conditions.
But the report outlined that GPs had lacked the time and resources to provide assessments on adjustments that could be made in order for individuals to stay in work.
It comes as 93 per cent of the 2.7 million receiving fit notes in the final quarter of 2024/25 were labelled “not fit for work”. Just seven per cent were handed “may be fit for work”.
The CSJ said the figures reflected a system that “defaults to full sickness absence”.
Benefits reforms could hand billions to Treasury
Labour MP Carolyn Harris, vice chair of the CSJ, said: “As this timely report shows, the UK economy is facing a ‘midlife crisis’.”
Harris called for the government to pilot a “National Work and Health Service” in a bid to help “stem the flow” of the near 300,000 exiting the Labour market due to sickness.
The report said the new service would help reduce unnecessary workforce drop-out for older workers and “keep them meaningfully engaged with employment, even if at a reduced level”.
It also recommended age-specialist careers guidance through the new National Jobs and Careers Service.
Mercy Muroki, development director at the CSJ, said: “By adopting the measures set out in this report, the Government can improve labour market outcomes for older people, reduce welfare dependency, and build a more inclusive, resilient labour market.”
She added: “Even a modest rise in employment among economically inactive people over 50 could generate billions in tax revenue and welfare savings.”
The calls come after the Treasury faced a daunting warning from the National Institute of Economic and Social Research that Rachel Reeves would need to raise more than £50bn in fresh taxes to stay within her “iron clad” fiscal rules.
The Chancellor had hoped a string of welfare reforms would shed £5bn in spending but fierce backlash from party rebels led to a government row back.
