As young workers struggle with low pay and high rent, and over-50s jump out of the workforce en masse, those in the sweet spot of work in the UK seem to be those in their forties.
Last week, the government started considering plans to give tax breaks to people over the age of 50 who want to come back to work. Predictably, it started a Twitter war with under-35s lamenting their sky-high student debt, extortionate rent and lower salaries – with no one offering them any tax relief. Besides the usual stereotype fight between “avocado-eating” young workers and “stuck in their ways” over-50s, both age groups are clearly not happy with what they’re getting from the labour market.
If you ask what’s the best age to work in the UK, the most likely answer you’ll get is “not the age I am currently”. Young and older workers are facing new and old problems. The one group that seems to be in the sweet spot is the squeezed middle: those in their forties.
Think of young people first. Those entering the workforce now are not having it easy. True, vacancy levels are very high, meaning a multitude of jobs out there. But this doesn’t mean that Gen Z has the right skills for these jobs: the labour market is plagued by a mismatch between what we learn at school and the skills we need in many of the jobs available.
Young people’s salaries tend to be lower but expenses tend to be high. According to data released last summer, four in ten people under 30 are spending more than 30 per cent of their pay on rent. London, of course, sees the highest prices in the country. Putting money on the side to buy property feels impossible for “generation rent”.
For the older bracket of this age group, there’s one additional concern: the cost of childcare vis-a-vis their salary. It’s the highest in Europe, three times higher than what couples spend in Germany. This has deep socio-cultural implications: if previously people were making life decisions – like when to have a baby – based on age, now they’re making them based on salary. Fifty-eight per cent of Gen Z and 57 per cent of millennials say they are keen to achieve a particular income level before making those decisions, according to research by wealth manager Evelyn Partners.
Things don’t look much brighter for older workers. In the year from April 2021 to March 2022, almost 16 per cent of people aged 50 to 54 years were economically inactive and 24 per cent of those aged 55 to 59 years were, according to ONS data. The reasons for this drop-out are various: long-term illnesses, disabilities which make it harder to find a job, caring responsibilities.
Millions of people have left the labour market since the pandemic: at the end of last year, there were around 88,000 more inactive Londoners aged between 50 and 64 years than in early 2020. Because of the lack of flexible opportunities, many of those are unable to re-access this market. “When they’ve been out of work, they can often only return to jobs which are beneath the level they were at previously”, says Dr Adrian Wright of the University of Central Lancashire. This productivity problem explains why the government is looking at incentives for this age group.
Now look at those in their forties. Last year, men aged between 40 and 49 were the highest full-time earners in the UK. The median weekly pay for employees in their forties was the highest at £727, compared to £678 for those between 30 and 39 and £681 for those between 50 and 59. This group is more likely to own a house already, having been able to buy one before the housing crisis reached its current peak. And it’s more likely to be in lucrative senior positions. A recent EY report found that there were no board members under 40 in any of the UK’s top financial services firms. Being over the age of 40 didn’t automatically mean you would land a top job – the average age for a board member was still 58 – but if you were younger, you’re almost guaranteed not to be appointed. While millennials have a lower income in their 30s than previous generations did, those in their forties are more likely to be saving up money for a nice, early retirement.
This picture is problematic in so many ways. More and more younger workers risk finding themselves in debt and struggling to get to the end of the month. Those in their thirties might be giving up on much-desired life opportunities because they don’t earn enough – accelerating the rise of the ageing society. And those in their fifties who have jumped out of work to take care of their health or their relatives’ will feel more and more forgotten. Things might be great for those in their forties, but until employment is better for everyone else, the UK is unlikely to solve most of its social and economic woes.
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