Alarm at soaring number of long-term unemployed

The total has more than doubled since the recession in 2008, according to research by the IPPR think tank.

Around 100,000 people over 50 who lost their jobs at the start of the economic crisis are now at risk of being forced to retire earlier than they planned, and with a lower pension, said the report.

The number of 18 to 24-year-olds who have been jobless for more than two years has almost trebled since 2008, from 36,000 to 95,000, according to the study.

IPPR also warned that the number of people unemployed for more than two years will continue to increase over the next 12 months because of the Government’s public sector cuts, and fewer jobs being created.

The report predicted that the public sector cuts will disproportionately hit women over the next few years. Tony Dolphin, IPPR’s chief economist, said: “The longer someone is out of work, the more they lose motivation and confidence. They also miss out on vital training and work experience.

“This means that even when employment starts to pick up again, they will find it hard to compete with other jobseekers and could find themselves permanently shut out of the jobs market.

“Almost a quarter of those who have been unemployed for more than two years are over 50. The risk is that older people who have been out of work for this long stand little chance of ever working again. This means many will be forced into early retirement, which will mean a lower standard of living during their old age.

“Previously, this has mostly affected men employed in low value-added manufacturing industries that are in decline as a result of technological change and competition from emerging economies. However, the Government’s cuts in public sector jobs will disproportionately affect women and they too may begin to retire early. The longer someone is unemployed, the less likely they are to ever return to work. If we’re going to provide decent services for our ageing population and clear the deficit, we need as many people in work as possible to maximise tax revenues.”

The think tank urged the Government to increase the employment rate from the current 70 per cent towards 80 per cent to stop people “permanently drifting away” from the jobs market.

Employment Minister Chris Grayling said: “This highlights the chronic failure of the welfare system we inherited to actually get people back into work.

“That’s why we launched the Work Programme, the largest welfare to work scheme this country has ever seen, to tackle long-term unemployment and provide support, built around individual needs, that will get people into jobs and keep them there. And that’s why we have a plan for growth which will encourage businesses to expand and take on more workers.”