Budget 2023: How Hunt will tempt over 50s back to work

As chancellor Jeremy Hunt took to the box to deliver his speech today (March 15), he did so with the knowledge there is a labour shortage in the UK.

Hunt said there are currently 3.5mn people of pre-retirement age who are not part of the UK's labour force, an increase of 320,000 since before the pandemic.

In his Budget, Hunt said the Department for Work and Pensions intends to increase the number of over-50s benefitting from mid-life MOTs five-fold, from 8,000 to 40,000 a year.

He also announced the creation of ‘returnerships’, dubbed a type of apprenticeship, which will be targeted at those over 50 looking to return to work.

They will focus on flexibility and previous experience, Hunt said, cutting down the amount of training needed before participants can return to the workforce.

"Older people are the most skilled and experienced people we have," said Hunt.

“For too many, turning 50 is a moment of anxiety about the cliff-edge of retirement, rather than a moment of anticipation about another two decades of fulfilment.

“I know this myself. After I turned 50 I was relegated to the backbenches and planned for a quiet life. But instead, I decided to set an example by embarking on a new career in finance.”

On pensions, Hunt decided to scrap the £1mn lifetime allowance cap, and upped the annual tax-free allowance by 50 per cent, from £40,000 to £60,000.

While the move was largely in a bid to lure NHS doctors back to work amid a staffing crisis at the public health service, Hunt said these changes would also benefit the rest of the UK’s workforce.

'Biggest change to welfare in decade'

In line with his bid to tackle inactivity, Hunt said the government today published the Disability Benefits Reform, which he dubbed the "biggest change to our welfare system in a decade".

It will abolish the work capability assessment in Great Britain and separate benefit entitlement from a person's inability to work.

In England and Wales, the government will fund a new programme called 'Universal Support', a new voluntary employment scheme for disabled people.

The government will spend up to £4,000 per person to help them find appropriate jobs. Hunt said it should fund 50,000 places each year.

For those forced to leave work due to issues such as back pain or mental health, Hunt said the government should be supporting them before they leave work.

We heard nothing from the chancellor on [later life care] today.Jonny Black, Abrdn

The chancellor therefore announced a £400mn plan to increase support for muscular and mental health problems.

Figures from the Office for National Statistics showing there are 1.7mn people currently not looking for work, but who say they would like a job. The figures show there are increasing numbers with long-term health conditions and many of these people are over age 50.

According to Baroness Ros Altmann, these people could still work with improved help, retraining or more flexible working conditions.

"From an advice perspective, today’s commitment provides clarity that will help those affected, and their advisers, start to hone their financial plans," said Jonny Black, strategy director at Abrdn.

"But when it comes to health, another area that still causes significant uncertainty is the cost of later life care. 

"We heard nothing from the chancellor on this today, and the last major development announced by the government, the cap on care costs, has been kicked down the road for another two years. 

"We need more certainty on this that people can concretely plan around. Until then, there will continue to be concern and confusion."

Have your say

Email FTAdviser with your views on these pushes to get more over-50s back into the workforce: simoney.kyriakou@ft.com