Third Age Employment Network

Week Starting 29th August

Many Older Women Face Pensions Bind

Only 50% of women aged 50+ have any pension provision at all and just under half (45%) in this age group expect to use their husband’s pension as their main source of income in retirement. However, given the divorce rate amongst women over 50 has gone up by 50% in the past 20 years and also that despite recent legislation, just 4% of divorced women do end up sharing their ex-husband’s pension, many older women are facing a real pensions bind.

These are just some of the findings from the ‘Asset Rich, Cash Poor’ report recently published by Norwich Union Equity Release.

The report also found that more than three quarters of the women surveyed realised it would be extremely difficult to survive on the current state pension, but are not in a position to put away enough money to build an adequate pension pot before they retire.

But although they are often ‘cash poor’, women over 50 are often ‘asset rich’, with almost half (49%) owning their home outright – a figure that goes up to 60% of those aged over 65. Its therefore not surprising that nearly 30% of women aged 50-54 said they were relying on their property as a means of generating income in retirement – as this may be their only option.

Nigel Spencer, head of marketing for Norwich Union Equity Release said, “Women are increasingly becoming the poorer sex when it comes to retirement and its worrying to see this problem compounded due to rising divorce rates amongst the over-50s. Many women have sacrificed careers, and therefore their own pension, to raise their family and as a result, are being unfairly punished.”

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Formal Qualifications A Flawed Proxy For Skills

According to a new study, people with formal management qualifications in the UK do not necessarily have effective management skills. But, although this is recognised, it doesn’t stop HR and development managers from demanding that candidates for management jobs possess such qualifications.

A study by researchers form Brunel University and Birkbeck College compared approaches to management training in six European countries. It found that whilst firms in Germany and Norway principally rely on learning-on-the job and internal training methods, firms in UK and Denmark combine internal and external methods – such as educational qualifications.

One of the co-authors of the report said, “Our research suggests that in the UK there is a mismatch between what is used and what is seen as the most effective way of developing managers. It appears that in the UK, formal, non-job related qualifications may be acting as a screening mechanism, rather than an effective means of improving managerial skills.”

This habit of using of formal qualifications as a screening tool and a proxy for skills and ability is not just confined to those recruiting for management positions however. Its widespread throughout the UK and applies to most semi-skilled, skilled and professional jobs – and to job applicants of all ages.

Lack of formal qualifications is one of the most difficult recruitment barriers to overcome – especially for older workers – who even though they may have built up a lifetime’s skills and experience, in many instances have not had the chance or opportunity to have those skills formally accredited. And even where such opportunities have existed, individuals may not have had the desire, foresight or confidence to take advantage of them.

Its paradoxical to say the least, that although each summer endless column inches and broadcasting hours are filled by employers and recruiters lining up to rubbish
formal ‘foundation’ qualifications – such as GCSEs, ‘A’ Levels, etc – so many of those same people set such store by them when they are recruiting new members of staff.

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Employment Prospects for ‘Core Jobless’ Set to Worsen

With the job market cooling, the prospects for those defined as the ‘core jobless’ look set to worsen. The most recent quarterly Labour Market Outlook from the CIPD reveals that more than 60% of employers exclude groups with certain characteristics from the recruitment process.

Amongst those defined as the ‘core jobless’ are people with a history of long-term sickness or incapacity, those with a history of drug or alcohol problems, and those with a criminal record.

John Philpott, the CIPD’s Chief Economist comments, ‘With fewer recruitment opportunities in a slightly cooler labour market, the Government’s policy task of moving people from these ‘core jobless’ groups up the job queue, off welfare benefits and into work looks set to get harder.

Widespread reluctance on the part of employers to recruit the core jobless highlights the magnitude of the task facing the Government as it strives to get more economically inactive benefit claimants – especially those claiming Incapacity Benefit – off welfare and into work.”

The report however does offer some hope to the Government’s welfare to work drive, finding that employers would be more likely to recruit the core jobless if more was done to improve their employability. But the report also suggests that employability measures must be matched by greater efforts to overcome the often unfair negative attitudes of employers toward the core jobless.

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‘Reasonable Adjustments’ Easy Say Most Small Businesses

According to 8 out of 10 small businesses surveyed by the Department of Work & Pensions, making ‘reasonable adjustments’ for their disabled staff has been easy.

The survey of just over a thousand organisations across the UK assessed employers’ awareness and responses to their new responsibilities and duties under the Disability Discrimination Act which came into effect last October..

Nearly two thirds (63%) of those questioned were aware of the Act and nearly three quarters (74%) were generally aware of the legislation.

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Research published earlier this year found two thirds of employers had yet to begin ‘age proofing’ their HR policies and working practices in preparation for next year’s age discrimination legislation. So the Age Positive team at the Department of Work & Pensions, have come up with a new tool to help employers identify and stamp out any ageism which may currently operate in their organisations.

The new 'Removing ageism - make it your business' age proofing tool consists of a simple-to-follow 3 step business checklist.

The Age Positive team say the tool is suitable for employers of any size or sector. Vist the web address below to view and download it (opens in new window).

Time was when the charity sector had a pretty poor image amongst many jobseekers, now a new survey shows 6 out of 10 employees working in the commercial sector believe the not-for-profit sector has cast off its ‘cardigan brigade’ image and offers strong career prospects.

The survey shows that a majority of people looking for a job change would now consider working in the charity sector. But the perceived pay gap between the commercial and the not-for-profit sectors remains the biggest barrier for many jobseekers. However, charity sector recruitment specialists maintain that for many job types those pay gaps have narrowed, or even disappeared.

According to the Home Office, almost a quarter of a million workers from the new EU states in Eastern Europe have come to Britain looking for work in the past year. This is 18 times the number the Home Office had expected would come each year.

More than half of these economic migrants come from Poland and 82% are aged between 18 and 34. In the main they are taking unskilled jobs and many are willing to work for lower wages than people already living here.

Although London has the greatest number of these migrants registering for work, the proportion in the capital is falling as more of them seek work in the South West and the Midlands. Commentators believe that the high cost of living in London and the South East is forcing them to look further afield for work.

Two TAEN members, the Chartered Management Institute and the Chartered Institute of Personnel and Development, are researching the impact of age and age discrimination in the workplace.

The survey and research aims to examine the personal experiences of managers and to provide a comprehensive picture of current practice in organisations across the UK.

To access and participate in the online survey, visit (opens in new window):

Norwich Union, the UK’s largest pension provider, has decided to sponsor TAEN’s Annual Conference this year.

Commenting on their decision, Richard Cox, Norwich Union’s Public Affairs Manager said, "As the UKs largest pension provider Norwich Union is well placed to assess the impact, both positive and negative, of demographic change. We have moved from a society that once worked 45+ years to sustain a retirement of around 15 years to one that now expects to work for around 35 years to finance a retirement of nearer 25 years. For a large number of people the sums simply don’t and won’t add up unless they take action today.

Raising awareness of the personal benefits of working longer will need to be matched by helping employers see the many benefits of employing older workers, coupled with new initiatives to equip older workers with the skills necessary to remain employable. TAEN’s work in general, and this conference in particular, is playing a valuable role in presenting the benefits of longer lives to employers and employees alike.

Richard added, “Norwich Union employs over 28,000 people in the UK and we recognise the valuable contribution which the over 45 talent pool can make to the continued success of our business.

It is important to us that we have a workforce that is reflective of our customers in order to achieve outstanding customer service. With an average customer age of 45 we are constantly seeking new ways of attracting and retaining older employees and look forward to learning from the experiences of others attending the conference on 'Profiting from longer lives'".

The Conference is taking place in London on 13th October. To find out more about the ‘Profiting from Longer Lives – health, wealth and the pursuit of happiness’ conference, click here. To book online click here.

A large part of the reason why the sums around work, retirement, pensions and savings don’t add up for many people, is that so many of us are not very good at the sums and the whole subject is not easy in the first place.

Timely then that the latest research report from the Department of Work & Pensions reviews the existing provision of financial education in the UK. It covers the provision for those who are still in compulsory education and those who have left it.

It concludes that for those still at school because financial education is a non-statutory subject, the take–up and effectiveness depends on the outlook of individual schools, how highly staff prioritise it and the confidence (and presumably competence) of those teachers responsible for teaching it. It found that opinion amongst those interviewed was mixed about whether the subject should be compulsory and accredited.

However, the Department for Education and Skills (DfES) in its White Paper on 14-19 year olds indicates that the Government wants to improve the profile of financial education and is currently considering whether to include financial capability more explicitly in the national Maths curriculum.

For the rest of us, the review identifies 4 key post-16 audiences for financial education but essentially its everybody. The question is how the different audiences should be addressed and what provision should be available to them.

The authors of the report have come up with 5 main recommendations, the first of which is likely to be fairly controversial and may be challenged by the Pension Commission report later this year, namely that its important not to assume that there is an immediate requirement to design and implement major financial education programmes for adults. It also warns, probably correctly, that there are no ‘quick fix’ solutions to increase the financial capability of the population.

Employment Trends Heading In The Wrong Direction

This month’s employment figures show the trends, at least in the short-term, have been heading in the wrong direction. This month there’s been a fall in the number of people in work and also in the employment rate. The number of unemployed people has increased and both the number of Jobseeker Allowance claimants and the claimant rate itself is up.

Last year employers trained more of their staff and spent nearly £4.4bn on staff training. As a result skills gaps are closing and the number of employees described as not being fully proficient to do their job has dropped over the past year. These are some of the key findings of the National Employer Skills Survey (NESS) 2004.

The number of staff who received training over the last 12 months (as a % of the workforce) rose from 53% in 2003 to 61% in 2004. The average amount spent per employee trained was £335, but averaged out across the workforce as a whole at £205 per capita.

Even so, skills shortages and gaps still exist and are negatively impacting organisational performance. Around 8% of establishments reported hard-to-fill vacancies and overall some 37% of actual vacancies are described as hard-to-fill.

The main skill areas where employers are experiencing shortages among applicants is for technical and practical skills, followed by communication skills, customer handling skills, team working, and problem solving skills.

The percentage of establishments identified as having staff who were not proficient fell from 23% in 2001 to 20% last year and the number of employees described as not being fully proficient to do their jobs is down from 2.4 to 1.5 million (9% of the total workforce).

The main skills gaps amongst existing employees were identified as communication, customer handling, team working, technical and practical skills, general IT user skills and management skills. Some 5% of managers were classified by their employers as not being proficient.

The region with the highest number of hard-to-fill vacancies was the South East with 46,000 such vacancies, the region with the lowest number was the North East with 9,200. London had the 3rd lowest number of hard-to-fill vacancies (19,150).

A new survey amongst members of The Institute of Directors (IOD) concludes the Government’s policy for supporting regional business is poorly understood and is irrelevant to business needs. Regional Development Agencies (RDAs) in particular come in for criticism.

Six years after the RDAs were set up, nearly a third (30%) of IOD members surveyed had not even heard of their local agency and fewer than 1 in 5 had contacted their local agency in the past year.

Of the directors who did know of their local RDA, only 13% rated its performance in promoting business efficiency, investment and competitiveness as good, or very good.

The IOD’s report says that the remit of the RDAs (which stretches from support for business to areas such as transport, education and skills) is too broad and insufficiently centred on business objectives.

The report goes on to point out that the Government’s attempts to help regional businesses are hampered by a bewildering mix of councils, quangos and other development bodies, many of whom have overlapping remits and responsibilities. Businesses say they just find the whole set-up confusing.

Earlier this year the Government listed 20 separate schemes, including the New Deal for Communities, the Special Grants Programme and others, which exist alongside the RDAs to support regeneration projects.

A Department of Health commissioned report has found the gap in life expectancy between the least wealthy and the population as a whole has been widening. Between 1997-9 and 2001-3, it widened by 2% for men and 5% for women.

This means life expectancy in the wealthiest areas is now seven to eight years longer than in the poorest areas. The current gap in life expectancy is one of the reasons Ministers have given for not increasing state pension age at the moment.

The Government pledged to reduce the health inequality gap between the poorest and the population as a whole by 10% between 1997 and 2010.

When should a bank account be classified as dormant ? This is the question that’s threatening to cause a rumpus over Gordon Brown’s proposal to transfer billions of pounds from dormant bank accounts to good causes.

Earlier this year the Government received a generally warm welcome for its manifesto pledge to take money from dormant bank and building society accounts (i.e. accounts which have had no payment activity – a.k.a. ‘forgotten accounts’) and transfer it into a special fund that would pay out to specific charities. The type of accounts that would be affected are savings and current accounts.

Treasury officials have been talking with the banking industry and charities about how the scheme should work but disagreement over when a bank account can be defined as dormant is threatening to cause a huge row. The banks believe that an account should be dormant for more than 10 years but it appears the Government is thinking that 3 years would be long enough for an account to be declared as ‘forgotten’ and for its contents to be withdrawn and paid into the special fund.

In the Irish Republic, where a similar scheme has already been set up, the definition used is 15 years.

If the Government’s definition prevails then up to £4 billion could be redistributed to various charities. But it would bring it into conflict with millions of people who might suddenly find their money had been taken – even though there would be a process in place to claim it back.

The Building Societies Association has protested about the Government’s plans -saying that the money does not belong to the banks, building societies or the Treasury: it belongs to the customer. Of course in some cases the customer is already dead.

New research commissioned by Jobcentre Plus has found less than half (43%) of employers who are looking for staff use its services.

Even so, over half a million (559,000) employers did use them in the past 12 months and Jobcentre Plus (JcP) advertised a total of 4 million vacancies, some 85% of which were successfully filled.

JcP has significantly improved the level of business it does with large employers (those who employ over 500 people) from 60% of such employers served in Summer 2002 to 71% in Autumn 2004.

The research also found that nearly 8 out of 10 (77%) of employers who did use JcP, placed more than half their vacancies with them.

Stephen Timms, the Pensions Minister, has said a radical reform of UK pensions, including incentives for people to go on working longer, will be complete by 2010.
The Government is planning to publish a consultation document about its proposed reforms next Spring.

Speaking to the Times newspaper, the Minister said that as 2010 was the year in which the state pension age for women will begin to rise, it didn’t make sense to hang around - so he hoped that the changes to pensions could be in place by then.

He also said he expected that part of the proposed reforms would entail UK employees having to work longer

Last week, David Blunkett, Secretary of State at the Department of Work and Pensions revealed that the Pension Commission report will be published later than originally planned – although its still expected before the end of the year.

Last week the consultation period for ‘Opportunity Age ’ended. Released by the Department of Work & Pensions shortly before the General Election, Opportunity Age – Opportunity and security throughout life contains the Government’s proposals for a ‘comprehensive strategy’ for dealing with the demographic changes which are already starting to impact the UK’s economy and society – and which will increasingly do so.

It contains a good analysis of the changes ahead and the way the DWP intends to approach them. It spells out in 3 chapters (Age & the Workforce; Active Ageing; and Services that promote well-being and independence) more detailed proposals. The final chapter deals with the way the Government intends organising itself to deliver them, across departments and agencies, in a joined-up fashion.

Having said that, Tony Blair in his foreword to the document says, “We do not claim to have all the answers to demographic change. No one has a road-map for a world where pensioners outnumber children and where, for most people, more than a third of life is lived after age 50.”

According to the CBI and property advisers GVA Grimley, three quarters of UK-based companies recently surveyed by them are planning to expand their businesses over the next two years - and 80% of those are planning to expand in the UK.

However it also shows that a significant number of companies are considering expanding some of their activities overseas – in particular to China and India. The most significant driver for doing so was ‘cost reduction’, followed by ‘access to new markets’ and ‘access to skills base’.

Stuart Morley, Head of Research at GVA Grimley, said, “Most companies in the UK are looking to expand in the next two years and most are looking to expand here. This is encouraging for the UK economy.”