Reducing the pension age, on a temporary and means-tested basis, for a short period would allow older workers the option to retire early and create opportunities for young people to start their careers.
The State Pension age recently reached 66 and, assuming full entitlement, the Government pays approximately £760 per month to recipients. Reducing the entry age would encourage people to retire and could help young people who are starting out.
Clearly any reduction is expensive, but we shouldn’t lose sight of the fact the Government is paying nearly £700 a month to some recipients on the Job Support Scheme (JSS).
Most recent Office for National Statistics (ONS) unemployment statistics show increasing levels of unemployment reflecting current economic uncertainty. However, it is the young people aged between 16 and 24 who are impacted the most, with a decrease of 220,000 people working in the three-month period to August. In older age groups there was a small decrease of 24,000 for those 65 and over and an increase in numbers employed amongst other ages.
Young people are most likely to be out of work as a result of this recession, and if they are working are often in jobs with inconsistent hours which can therefore be cut. There is not just the issue of the income they need now to meet living costs but the risk of a skills gap that requires state intervention for years ahead.
Not enough jobs are being created through growth. The Government recently announced that the National Skills Fund will provide access to college courses for those without A-Levels to provide training on skills necessary in the post-COVID-19 economy. This is helpful but only goes part of the way of getting young people working and building the economy of the future.
The economy is going to be rocked by the impact of Coronavirus for some time and we have to be realistic that it is young people who will ultimately be the source of economic prosperity, funding pension payments and reducing the burden on state intervention. All ideas should be on the table when it comes to helping them get into work.