This chapter examines the importance of career planning and the need for lifelong learning in supporting longer working lives and smooth job transitions for mid-to-late career workers. With rising life expectancy and evolving career trajectories, the need for career guidance, continuous upskilling, and adaptable training systems is greater than ever. While the United Kingdom does not significantly restrict career mobility, it lacks robust support mechanisms for older workers, particularly in navigating career changes and lifelong learning. There are significant gaps in the United Kingdom in career guidance and employment support, such as the need for a comprehensive, all-age career guidance system, improved employer engagement in career development, and tailored support for older, unemployed, or displaced workers.

As working lives lengthen and new skills are demanded by a rapidly evolving labour market, career guidance support is essential to navigate changes, facilitate labour market transitions, and enhance skills. However, for workers to make informed decisions about investing in their learning, education, and training, they need access to the information and support that foster effective career management skills. Continuing to work in the same profession or job can become unsustainable for some people due to health, caregiving responsibilities or a change in personal preferences, prompting a change later in life. However, late career workers may not have good information on what opportunities align with their skillsets or flexibility needs. Further, evidence shows that job search difficulty increases with age, while confidence in finding a new job declines with age (Figure 2.1).

The environment for supporting workers to change job or career mid or later in life is under-institutionalised in the United Kingdom albeit high on the political agenda and all stakeholders recognise the greater need for early intervention and providing more support to lengthen working lives. While the policy environment does not generally constrain mobility, there is little active government support for people who want to change job or career later in life.

There is a lack of a well-integrated and established career guidance system that provides support throughout an adult’s life in the United Kingdom (Holman, 2022[2]; Hooley, Percy and Neary, 2023[3]; Barnes, 2023[4]). The system is generally seen as effective at the school and higher education level, following the Holman reforms, but is weakest for those in work and outside the labour market. Key challenges that have been identified in England include shortages of funding and frequent changes in the names, locations and brands of services and changes to individual entitlement (Hooley, Percy and Neary, 2023[3]). The system lacks coherence, with fragmentation among multiple funders, providers and overlapping client groups, with limited and patchy access.

In the United Kingdom careers services are deeply integrated into educational institutions, and although they do work with adults – for example in university and further education colleges, and the NCS – they primarily deal with young people and people leaving fulltime education for the first time. For employed adults, career guidance services are largely available through the private sector, and for those in work, it is to some extent available through their employer. Several companies are filling a gap to support workers switch jobs or develop their career through a combination of career counselling and guidance services (Box 2.1).1 The private sector is arguably a strength of the UK economy, and there may be lessons that could be transferred from the private sector to the public sector in this area. However, the largely unregulated private sector in career guidance is not well understood by the public. As a result, even those who can afford these services may struggle to access them. Holman (2022[2]) recommended supporting employed adults through a publicly funded, high-quality careers guidance system that is accessible to everyone, regardless of their career stage, based on comprehensive and dynamic information and data.

There are likely to be wide gaps in access to services between different groups, with ethnic minorities, older workers, employees in small firms having less access. Based on the OECD Survey of Career Guidance for Adults (SCGA) (which includes Chile, France, Germany, Italy, New Zealand and the United States, but not the United Kingdom) on average about 25% of people receive career guidance from a Public Employment Service (OECD, 2021[5]). The survey also shows that there are large gaps across a range of socio‑economic characteristics, including gender, education and age. On average there is a 22 percentage point gap in the use of career guidance services between people aged 25‑54 and those aged 55 and over. Employers, governments and social partners can act to help narrow this gap by supporting targeted career planning initiatives (Box 2.2).

Career guidance services are not currently available through JCP, and JCP services are only available to people in receipt of Universal Credit or other welfare benefits. In contrast, in some OECD countries such as Austria, Czechia, Estonia, Japan, Lithuania and the United States, the PES offers employment services to all adults regardless of employment status. However, there is a cost associated with this, and consideration therefore needs to be given to whether the JCP has the capacity to offer such services to all adults. The SCGA survey also shows that dissatisfaction with PES provided career guidance services is relatively high in the surveyed countries (OECD, 2021[5]).

The National Careers Service (NCS) provides an online, phone and in-person service that is available to anyone over the age of 13 living in England. An online skills assessment is available which takes 5‑10 minutes to complete and contains around 50 multichoice questions. It then provides suggestions of roles that the respondent might enjoy. Also available online is a more in-depth skills health check which involves 10 assessments which each take between 15 to 30 minutes. The outcome is a report which can help the respondent identity their personal and work-based skills. For people who want additional support it is also possible to speak to a trained careers advisor either on the phone or in person. About 60% of in-person meetings take place in a JCP office (Albone, Thompson and Coltman, 2023[6]). The available advice could include i) participation in webinars or group sessions, ii) signposting towards specialist resources and support, and iii) individual guidance appointments, either online or at a local venue (separate Careers services are also available in Scotland, Northern Ireland and Wales).

The effectiveness of the NCS is questionable. It is poorly advertised, and an impact evaluation of the service could not identify a positive impact on employment or benefit dependency, although it did find a significant impact of guidance on participation in education or training (Lane et al., 2017[7]). However, the most recent customer satisfaction review finds that the overall quality of service continues to be highly rated by telephone and face‑to-face customers, with 93% agreeing that it was good (Albone, Thompson and Coltman, 2023[6]).

While the NCS is promoted as an all-age service supporting individuals throughout their careers, it is not seen as a resource for those currently employed and it appears largely designed to support transition from education to work and for those out of work. The most recent review of customer satisfaction with the service shows that 62% of face‑to-face customers were unemployed and looking for work (59% of telephone customers and 27% of online customers) (Albone, Thompson and Coltman, 2023[6]). In contrast 41% of online customers who used the service were in work indicating that there is some demand for career guidance services for those in work. Funding is often targeted at specific groups, such as the long-term unemployed (Barnes, 2023[4]).

The government introduced Skills Bootcamps in 2021 which offer free flexible courses of up to 16 weeks for people who are looking to change job or career. But take‑up is apparently low, and no evaluations are yet available. Many companies have established Mid-Life Career Reviews (MLCRs) (sometimes known as “mid-life MOTs” in the United Kingdom, borrowing the term used for a car’s annual mechanical check) with some evidence suggesting that these can be effective in keeping people in work. The previous government launched a web-based MOT where you can check the status of your work, your health, and your finances for retirement – but with no action following, other than informing people about services and institutions that could be useful. These initiatives are discussed further below.

A well-connected career guidance support system for adults is crucial to provide accurate information, advice, and guidance on career options and the necessary education and training. This empowers individuals to make well-informed decisions about their future paths.

Traditional career planning, characterised by setting long-term professional goals and following a linear path to achieve them, has faced significant criticism in recent years. Critics argue that this model is increasingly outdated in today’s rapidly changing job market, as the unpredictability of modern careers renders rigid planning less practical, as unforeseen opportunities and challenges often necessitate flexibility and responsiveness (Savickas et al., 2009[9]). Instead, there has been a shift in emphasis towards the idea of career adaptability, which emphasises the development of skills and attitudes that enable individuals to navigate uncertainty and seize opportunities in their career journeys (Savickas et al., 2009[9]; Brown et al., 2012[10]).

As the concept of career adaptability continues to gain traction, there is a growing emphasis on developing interventions and strategies to enhance this competence. Career counsellors and human resource professionals are increasingly focusing on helping individuals build adaptability skills, such as self-awareness, proactive career exploration, and resilience in the face of change (Soares, Carvalho and Silva, 2022[11]). This shift represents a more dynamic and holistic approach to career development, better suited to the challenges and opportunities of the contemporary work environment.

The policy implications of career adaptability emphasise the need for a shift in how career support services, educational programmes, and employment initiatives are structured to support dynamic skill development and employability (Brown et al., 2012[10]; Bimrose et al., 2011[12]). Traditional career support has often focused on helping individuals acquire specific skills or qualifications. However, the concept of career adaptability suggests that, to navigate fast-changing job markets, policies should prioritise fostering adaptability competencies – such as control, curiosity, commitment, confidence, and concern – in individuals across all stages of their careers. These competencies equip individuals to respond flexibly to labour market changes, enhancing resilience and self-sufficiency in career decision-making.

Control involves taking responsibility for one’s career, making proactive decisions, and shaping one’s professional trajectory. Curiosity drives individuals to explore new opportunities, understand different career possibilities, and seek diverse experiences, which broadens their adaptability. Commitment reflects a dedication to engaging with new tasks and responsibilities, which fosters resilience and ongoing growth. Confidence, meanwhile, is the self-assurance needed to handle career transitions, overcome obstacles, and thrive in changing work environments. Together, these competencies equip individuals to navigate career shifts and remain adaptable in an evolving job market.

Additionally, policies should encourage the development of learning opportunities that support adaptability, such as access to upskilling and re‑skilling initiatives, flexible learning environments, and self-directed education. By facilitating continuous learning, individuals can better manage career transitions and unexpected challenges. The use of “opportunity structures” – pathways that balance flexibility with structured career development options – enables individuals to pursue varied trajectories while adapting to external economic pressures. For example, a strong opportunity structure might allow someone to transition to a new field by offering accessible retraining programmes, or it could provide pathways for career advancement within a company. Emphasising adaptability over static qualifications may also require a re‑evaluation of progression measures, such as moving away from viewing formal credentials as the primary indicators of readiness and instead tracking adaptability competencies and career trajectories over time.

Various dimensions of learning support these competencies and play a key role in developing career adapt-abilities at work (Brown et al., 2012[10]):

• Learning through challenging work: Engaging in challenging tasks helps individuals develop competencies such as control, commitment, confidence, and concern. Mid-career workers often face steep learning curves when transitioning to new roles, which can bolster their adaptability. By mastering demanding work, individuals gain confidence and a sense of control over their careers, fostering a positive outlook for future challenges.

• Updating a substantive knowledge base: This dimension emphasises the importance of maintaining and expanding one’s technical and professional knowledge to stay relevant in changing job environments. Workers who engage in ongoing education, training, or skill development enhance their adaptability by broadening their horizons and staying current. This knowledge base is critical in fostering curiosity and confidence, allowing individuals to envision and pursue new opportunities.

• Learning through interactions at work: Work-related interactions, both formal and informal, provide valuable opportunities for developing adaptability. Collaboration, mentorship, and networking help individuals learn from others, build social capital, and reinforce commitment and curiosity. These social exchanges are particularly impactful for older workers, as they offer support systems and broaden perspectives through shared experiences and collective problem-solving.

• Self-Directed learning and self-reflexiveness: This dimension highlights the role of personal initiative and self-awareness in career adaptability. Workers who are self-directed in learning and reflective about their skills, experiences, and career goals tend to be more adaptable. By assessing their competencies and envisioning future paths, individuals build resilience and flexibility. This proactive approach strengthens their control and confidence, empowering them to navigate changes and seek out growth opportunities.

These four dimensions collectively equip mid-career workers with the adaptability required to respond to new professional demands, fostering long-term career resilience.

Career guidance occurs at key transition points in a person’s life, such as transitioning from education to work, experiencing unemployment or redundancy, returning to the workforce, or relocating. During this process, individuals collaborate with trained guidance practitioners to explore their aspirations, expectations, qualifications, skills, and experiences, ultimately aiding their progress into further learning or employment. Unlike career guidance, lifelong guidance adopts a continuous perspective, engaging individuals throughout their lives. It focuses on developing strategies, competencies, and skills to manage various transitions (Barnes, 2023[4]). Systems offering lifelong guidance support individuals not only at critical transition points but also throughout their careers, promoting ongoing career development. For individuals in low-skilled, low-wage, and/or insecure employment, lifelong career guidance offers opportunities for skills development, career changes, and progression into more stable and rewarding jobs (OECD, 2019[13]; Cedefop, 2016[14]).

The system needs to provide accessible, consistent guidance services throughout the country. Key to this would be strategic collaboration between government bodies, educational institutions, employers, and private career services, ensuring a co‑ordinated approach to skill-building and career transitions. Such partnerships could be locally administered to tailor support based on regional job markets, increasing the relevance and effectiveness of career advice.

Employers can play a central role by integrating career guidance into workplaces (discussed further below). This involvement could include offering employees opportunities to participate in training programmes, career assessments, and development planning, fostering a culture of continuous growth and upskilling. For smaller businesses, which may lack dedicated human resources for such programmes, government support or partnerships with local career centres could help bridge this gap, enhancing access to guidance for all workers.

Also vital is investment in high-quality career practitioners of which there is a shortage in parts of the United Kingdom (Careers England, 2022[15]). The primary reasons for shortages in the career guidance sector include poor pay, limited opportunities for professional development, and a lack of clear progression pathways. Many career advisors feel that their roles are underpaid, especially compared to similar professions, making it challenging to attract and retain skilled professionals. Furthermore, high-stress levels associated with performance‑based funding and outcome pressures, coupled with a lack of adequate funding for professional development, have led to high turnover rates. Additionally, limited investment in training and qualifications, particularly for Level 6 and 7 qualifications, exacerbates the shortage by reducing the pool of qualified candidates. The Career Development Institute (CDI), as the UK’s professional body for career development practitioners, plays a crucial role in maintaining a qualified workforce that engages in ongoing professional development and adheres to a unified code of ethics (Barnes, 2023[4]).

A Careers Profession Taskforce could act to address workforce planning and create strategies to improve recruitment and retention (Careers England, 2022[15]). In England a national framework to support training and continuous professional development, similar to systems in countries like Scotland and Germany could also play a role. Increased funding to allow competitive salaries and the establishment of training bursaries for advanced qualifications are also recommended to build a more sustainable career guidance workforce.

Finally, the availability of high-quality, up-to-date labour market information is also essential. Ensuring this information is customisable and includes both quantitative and qualitative data is vital (Hofer, Zhivkovikj and Smyth, 2020[16]). England’s labour market information system is well-developed, with various organisations providing labour market data and intelligence, but there are notable gaps (Barnes and Bimrose, 2021[17]). There is limited detailed information on skills and sector-specific data. This poses challenges for those delivering career guidance services to adults, particularly when supporting individuals seeking to upskill, reskill, or transfer their skills. Improving data quality to allow people to see how transferable the skills they have are to other jobs/occupations would make the service more useful. Current systems such as the NCS might be useful if you know what you want to do but is not so useful if you don’t know what you want to do and how transferable your skills are.

The United Kingdom has taken steps to ensure the quality of LMI data by setting up LMI for All; an online repository of data that collects, vets and standardises existing labour market data (OECD, 2021[5]; Barnes and Bimrose, 2021[17]). This allows career development practitioners to work with software developers to design online platforms that showcase selected data from LMI for All in a way that suits their clients’ needs. There are also various skills forecasts, each with different sector coverage and objectives. The most prominent is the economy-wide Working Futures (WF),2 now updated as the Skills Imperative 2035 programme.3 Many recommendations have been made on improving the LMI system in England (Barnes and Bimrose, 2021[17]). Therefore, it is unfortunate that from the end of 2024 the data available from LMI for All will no longer be updated. Access to LMI for All, including the API, will continue to be available until the end of October 2025.

In Scotland and Wales, skills and careers are devolved, and support is provided through the devolved governments. In Scotland, the careers guidance system works quite differently than in England as the careers service was dismantled in England in 1997, but not in Scotland.4 Skills Development Scotland has a network of local offices where individuals can access career advice and guidance and is specifically targeted at all ages. Scotland already has a well-developed skills planning and LMI system. In Northern Ireland, social security and employment support are transferred powers and responsibility for policy sits with members of the Northern Ireland Executive.

The new government has announced the creation of a new National Jobs and Careers service by bringing the NCS and Jobcentre Plus together. The case for better integration and co‑ordination between employment support, skills provision and career guidance has been made by several organisations (Phillips, 2022[18]; Institute for Employment Studies, 2024[19]; Wilkes et al., 2023[20]) and is supported by this report. The IES Commission on the future of employment support notes that JCPs have largely become about administering welfare benefits and monitoring the various conditionality requirements. JCPs are focused primarily on “labour activation” – how to get people into a job so that they do not need to claim benefits. In contrast careers services aim to help someone engage with work and learning opportunities that enrich their working life and help it to remain sustainable over time. The introduction of the Midlife MOTs in JCPs has to some extent already brought the idea of longer-term career guidance within JCPs, but a MLCR by itself does not represent a system of long-term career guidance.

An integrated jobs and career service would provide continuous support to individuals throughout their working lives, addressing the challenges of a changing labour market. This service would offer not just job placement, but also lifelong career guidance, skills development, and job-matching tailored to individual needs. The service also needs to consider the importance of adaptability discussed above. By focusing on the specific barriers individuals face, an integrated service could help bridge gaps in employment and skill levels.

The model proposed by the Institute for Employment Studies (2024[19]) is structured around three main components: a digital platform for broad access, high-street centres for in-person support, and outreach programmes for those not actively seeking work. The digital service would allow individuals to explore career options, develop skills, and access remote guidance, ensuring accessibility for those unable to attend in person. High-street centres would bring together resources from Jobcentre Plus and local job shops, providing intensive face‑to-face support and assistance with skills training and job applications. Meanwhile, the outreach model would co-locate career advisors within community services, reaching individuals disconnected from the labour market due to barriers such as health issues or caring responsibilities.

Local partnerships and devolution play a pivotal role in this model, enabling services to be adapted to regional labour markets and local employer needs. Labour Market Partnerships, led by local councils in England and mirrored in devolved nations, would co‑ordinate employment, skills, and other services to create a cohesive, accessible support network. Scotland, Northern Ireland, and Wales, which have implemented partial devolution, serve as examples of how tailored local control can address specific regional needs and priorities. Extending this approach across the United Kingdom would facilitate closer co‑operation between employers, educational institutions, and community organisations, making it easier for individuals to navigate support systems aligned with their local job markets.

Central government would oversee this structure by setting national employment targets and standards to ensure consistency across regions. Its role would focus on providing funding, resources, and guidance to support local partnerships, allowing local authorities to adapt services to meet the needs of their communities. Establishing a national Labour Market Board would facilitate this oversight, promoting workforce participation, career progression, and improvements in job quality. Rather than centralised control, the government’s role would shift towards enabling and supporting regional efforts, fostering a collaborative approach to employment support.

A cultural shift within employment support services would be essential, moving from a compliance‑driven model towards an empowering, participant-focused system (Institute for Employment Studies, 2024[19]). Reforms would include revisiting conditionality in benefits, shifting the emphasis from rigid job-search requirements to readiness and skills development, which could help engage older workers more effectively. This person-centred approach would encourage individuals to engage with the services, enabling them to pursue employment that is both meaningful and sustainable.

Overall, an integrated jobs and career service would be a cornerstone of lifelong employability, providing guidance and opportunities for skills development that evolve with the job market. This approach aims to close skills gaps, increase workforce resilience, and create a more adaptable labour force. By supporting career mobility and focusing on sustainable employment, this system would align with broader economic objectives, ensuring that individuals can continue to contribute effectively to the workforce throughout their lives.

Regular career conversations and/or mid-life career reviews are a way of facilitating structured ongoing dialogues between an employee and their manager about the employees’ career goals, aspirations and options for career development. Many workers wish to change jobs or progress in their careers from mid-career onwards, but the pathways are often unclear. Evidence shows that as workers age, they are less likely to review their career options, particularly low-skilled workers (OECD, 2024[21]). It is increasingly important for workers of all skill-levels to proactively reflect on career mobility before change becomes unavoidable or is no longer feasible (Box 2.3).

Tools such as mid-life career reviews (MLCR) or mid-life reviews (often referred to as a Midlife MOT in the United Kingdom) can play a key role in engaging mid-to-late career workers to actively think about their career. A midlife review can encourage people to review their current situation, anticipate future changes, and prepare accordingly. It can provide information on career and skills development, skills assessments, and offers advice on health and pension matters. While there is evidence that a mid-career review can be effective (Watts et al., 2015[23]), it is not clear that bundling this with health and wealth elements and having these discussions with employers is really effective. SMEs face particular constraints in not necessarily being able to provide the resources for any follow-up actions that may be identified by a mid-career review.

In 2021 DWP invested GBP 5 million to expand their MLCR online, in jobcentres and in trials with private organisations, and in 2023 DWP launched a free MLCR website to help people prepare for later life and retirement.5 Targeted at both individuals and employers, this initiative specifically supports people over 50, a group often disproportionately affected by health issues and caregiving responsibilities that can hinder their return to work after a break.

The digital MLCR is based on signposting tools and charity resources around the three areas of work, health and money, but unlike the digital tools used by some private companies there is no individualised assessment. People can either choose a MLCR goal (for example: “Plan better for the future”, “Re‑enter the workforce after time away from employment”, “Improve jobseeking skills including CV and interview guidance”) or browse resources that are available in their nation. After choosing a goal a list of resources is provided.

DWP has trialled MLCRs in three areas of England, the Northeast, Cornwall and Devon, and East Anglia, however evaluations are not yet available. The interventions were offered to employees through their employer and delivered through a combination of group workshops, awareness sessions, individual meetings, and online learning. Depending on the supplier and location, the sessions lasted between 30 and 90 minutes, and all participants were given an action plan. The sessions were carried out over the phone, online, or in person. As part of the delivery process, innovation was actively promoted, with the department giving suppliers the freedom to develop creative methods for engaging with people. Some of these innovations included: A health bus visiting employers’ premises to provide basic health checks and support awareness of good health to staff; Apps created by suppliers to provide engaging content to participants to support their decision-making and future planning; and hosting jobs fair and events with employers including SMEs in their local area.

Several private companies in the United Kingdom such as Phoenix Group, Aviva, Legal & General, Mercer and the Centre for Ageing Better have also introduced a MLCR (Box 2.4). The Phoenix Group MLCR pilot sought to empower colleagues to make better-informed and more balanced decisions regarding work, wealth, and well-being (Phoenix Insights, 2023[24]). This pilot, involving a sample of 324 colleagues aged 40 and above in the United Kingdom, ran from mid-October to mid-December 2022. The Behavioural Insights Team (BIT) conducted in-depth qualitative research to evaluate the process. This included a collaborative workshop with key stakeholders of the pilot and 18 interviews with participants and sponsors. The Phoenix Group MLCR pilot had two main features:

There is evidence from MLCRs that have been piloted thus far that they have successfully changed people’s attitudes towards retirement and their intentions to prepare for it. However, there is still limited knowledge about the direct impact of MLCRs on behavioural change, such as whether individuals take specific actions as a result of participating in these programmes. Phoenix Insights suggests that to further improve MLCRs, interventions need to be Easy, Attractive, Social and Timely (Phoenix Insights, 2023[24]).

One conclusion from evaluations of the Phoenix Group programme is that self-assessment alone does not ensure behavioural changes or improved retirement outcomes. Phoenix suggests the following recommendations for government to widen the provision and coverage of MLCRs (Phoenix Insights, 2023[24]):

• Monitor and improve the midlife MLCR website and evaluate its usefulness: Continuously monitor usage and implement iterative improvements to the newly launched MLCR website.

• Promote through employers: Work with trade bodies to encourage companies to promote and use MLCRs, and where appropriate, direct them to the DWP website. Sharing best practices should also be encouraged.

• Offer incentives to employers: Provide specific off-the‑shelf or open-source MLCRs to support smaller organisations with financial constraints, enabling them to offer MLCRs at a lower cost.

• Enhance in-person services: Expand and improve the DWP’s in-person MLCR services. Social interaction and support are crucial during MLCRs, so ensuring public access to free and reliable in-person engagement beyond Jobcentre Plus is important. Integrate these services with the guidance offered by MaPS (Money and Pension Service) for a more holistic approach. Collaboration with charities or non-profits could also provide accessible and suitable support.

• Review regulations for non-government providers: As MLCR provision by non-government organisations and the private sector becomes more common, the government and relevant regulators should review existing regulations and legislation to ensure confidentiality, privacy, and quality of MLCRs.

• Develop a holistic plan for MLCRs: The government should establish a clear roadmap for the future of MLCRs. This should ensure better integration of government support related to the three pillars, which will likely span different departments. For instance, work-related support could be expanded beyond Jobcentre Plus to include career and skills reviews, addressing the needs of midlife workers. Currently, there is no clear rationale for focusing on the three specific areas. Additional evidence is needed to determine if other areas should also be included.

• Share research and evaluation findings: There is a need for longitudinal research on the medium to long-term impact of Midlife MLCRs on people’s behaviours. This should analyse the effect on career, financial, and health choices, as well as employees’ retention, job satisfaction, productivity and overall well-being.

Also critical is the need for service provision to be embedded into the MLCR process to support any follow-up actions, for example by including access to mentoring and coaching, health programmes, and financial advice or guidance in the MLCR. Yet most SMEs would face constraints in being able to provide these resources.

Age management policies such as job shadowing, job rotation and redeployment are examples of policies that can be used to stimulate internal mobility yielding benefits for both employers and workers. They can promote better matches between employer and position without an employee having to seek outside opportunities. These polices are oriented towards prevention, rather than reaction to, challenges arising from a multigenerational workforce, thus pre‑empting difficulties that may push older workers out of the labour market prematurely. Rotating between roles has been shown to expand workers’ skillsets and can help identify roles that are a better fit for the next stage of their career (Botti, Calzavara and Mora, 2020[25]).

Active labour market policies (ALMPs) are crucial in assisting individuals, particularly older workers, in re‑entering the workforce. These policies encompass a range of measures, including job placement services, vocational training, and employment subsidies, all designed to enhance employability and facilitate job transitions. For older workers, ALMPs are vital in addressing challenges such as outdated skills and age‑related biases. Well-designed ALMPs can mitigate the adverse effects of job displacement and support the integration of older individuals into emerging sectors. By promoting continuous skill development and providing targeted support, these policies not only improve employment prospects for older workers but also contribute to the overall resilience and adaptability of the labour market. The United Kingdom spends very little on ALMPs as a share of GDP relative to other OECD countries (Figure 2.2). This limited investment may affect the country’s ability to effectively support unemployed individuals in re‑entering the workforce. In contrast, countries with higher ALMP spending often experience better employment outcomes, suggesting that increased funding in this area could enhance the United Kingdom’s labour market performance.

The support for late career workers in the job market tends to be part of broader programmes rather than ones specifically designed for them. Individuals aged 50 and over, who are seeking to return to work after unemployment generally participate in either mandatory or voluntary schemes that are aimed at all adults in general. Some programmes have targeted older workers such as the New Deal 50+. This lack of age‑specific targeting is not unique to the United Kingdom, but is also common across Europe, partly due to challenges in designing and implementing such programmes. Exceptions include Germany’s Perspektive 50 plus and targeted support measures in Korea (OECD, 2018[26]).

A lack of targeting at older workers overlooks the unique barriers such workers face, such as age discrimination, health issues, outdated skills, or caring responsibilities, which make it harder for them to re‑enter the workforce. While general programmes can support many older people, there seems to be a recurring gap in addressing the distinctive needs of the 50+ group. Research has suggested that personalised support, such as assigning older personal advisors to older jobseekers, can help build confidence and better address their needs (Watts et al., 2015[23]; Parsons and Walsh, 2019[27]). Of course, some programmes, though not targeted at older people specifically, do disproportionately impact them, such as those for individuals with illnesses or disabilities.

The UK Government set out a strategic vision in the 2017 Fuller Working Lives strategy to address the challenges associated with population ageing mainly focused on efforts to improve the supply of labour. The strategy built on a range of previous public policy measures, including the implementation of legislation to eliminate age discrimination in various employment contexts, further increasing the State Pension Age (SPA), and evolving changes to occupational and private pension funding and benefits. This included revised taxation of “pension pots”, expanded rights to request flexible working, and the abolition of the default retirement age (DRA).

However, support for late‑career workers such as retraining schemes and employment services, often operate in isolation, failing to address the specific challenges older workers face, such as age‑related discrimination, skills gaps, or health issues. Very few programmes have provided tailored support to the over 50s. A more integrated approach is needed, combining personalised employment support, accessible training, and stronger employer engagement to ensure that late‑career workers receive the comprehensive assistance required to re‑enter and remain in the workforce.

The evidence indicates that mainstream employment programmes have generally been less effective for people over 50. For instance, during the Work Programme (which operated from 2011 to 2017 to tackle unemployment after the recession), older workers had much poorer outcomes compared to younger ones (Winton and Subosa, 2022[28]). This has been partly attributed to the lack of a specialised support plan for this age group. Moreover, the programme’s design encouraged providers to focus on achieving quick job placements, which led to clients with greater employment challenges, such as those over 50, being sidelined. The New Deal 50 Plus, launched in 2000, was a national programme for over‑50s, helping 120 000 start jobs. It offered a wage top-up, training grants, and support from personal advisors, who played a key role in improving job searches and confidence. However, participants were generally closer to employment, making outcomes appear better compared to longer-term programmes like Restart.

A further significant issue in the United Kingdom is the fact that most unemployed individuals do not use the JCP to find work (Figure 2.3); in fact, a larger number seem to rely on private employment services.

Further, many people who could potentially benefit from JCP employment support are excluded as they are outside the labour market. Those aged 65 and over are not able to claim Universal Credit and therefore do not have access to JCP. Many individuals who exit the workforce later in their careers would be interested in returning to work if suitable opportunities, such as flexible working, and the right support were available. However, the primary access point for such support is through the benefits system and employment services, which many are hesitant to use. To better reach the large number of economically inactive people aged 50 and over, it’s essential to rethink how these services are delivered.

There are two main types of interventions that have proven effective in helping individuals transition into good or better employment: “career pathways” models, which integrate industry training with placement support, and adviser-led models that provide onward referral to specialised services. In the United Kingdom Sector-based Work Academy Programme (SWAPs), are an example of the former approach and is similar to other programmes such as WorkAdvance in the United States. The programme targets sectors where there is a strong demand for workers, and aims to support unemployed people looking to move into a different sector.6 The programme can last up to six weeks and includes: i) pre‑employment training, matched to the business sector of the employer and delivered by the employer or a local training provider, ii) a short work placement with the business, and iii) a guaranteed job interview for the participant or help with the job application process. An impact evaluation of the programme found that participants spent significantly longer in employment than a matched comparison group not receiving this support. However, the study did not measure whether participation led to better earnings or employment retention (Department for Work and Pensions, 2016[30]).

SWAPs have recently received extra funding as part of the governments “Returnership Initiative” aimed at supporting a return to work for over 50s who have left the labour market, however, take up of the scheme by over 50s is unclear as DWP stopped publishing statistics on Work Academy starts at the end of 2017. Between 2011 and 2017 the number of SWAP starts aged 50+ averaged around 480 per month. In 2015‑16, the Department for Work and Pensions ran trials in four locations to boost take up of the Work Experience and SWAPs programmes among older benefit claimants. A key finding from the review is that participants seemed to benefit from exploring new work areas. However, there is no data on whether this exploration led to employment in those fields, though it could be supported by appropriate training or retraining. Additionally, this pathway is not always available through the current range of interventions, indicating that work experience alone (except for low or unskilled jobs) may not be sufficient for older jobseekers to transition into new occupations. SWAP participants achieved the best outcomes when all three elements – mandatory pre‑employment training, work experience placement, and guaranteed interview – were completed. However, only 13% of participants reported that they had experienced all three elements of the programme (compared to 40% of those aged 18‑24 in earlier research).

A significant body of evidence highlights the importance of aligning employment services with skills training to help people access and progress in jobs, particularly through demand-driven training programmes. These programmes, especially career pathways focused on high-growth sectors and involving local employers, are effective when paired with pre‑ and post-placement support. Some lessons for the UK programme include:

Universal Credit work coaches serve as the primary contact for most individuals receiving employment support from the DWP. These coaches have some flexibility in determining how often they meet with claimants, the type of support they provide or direct claimants towards, and the goals and responsibilities outlined in the claimant’s commitments. Work coaches can refer claimants to various opportunities, including local jobs, employment programmes, and external local services like college courses. They can also commission local support when needed, using the Flexible Support Fund.

Recent innovations have included the provision of 50PLUS champions in place across England, Scotland and Wales working directly with Jobcentres and employers to remove barriers that are keeping older people out of work. Within the JCP network there are now 77 50PLUS champions who act as a single point of contact for sharing best practice to staff locally and nationally, as well as making staff aware of what is available for older claimants in their local area. They also liaise with employers and providers to raise the profile of older workers and highlight the benefits of employing an older claimant. While this is a positive development, at present there is no evaluation of the effectiveness of 50PLUS champions.

The Centre for Ageing Better, in partnership with the DWP and Greater Manchester Combined Authority, developed a new strategy in 2022 to help individuals aged 50+ find employment based on a co-creation approach (Box 2.5). People over 50 identified six key ingredients for good employment support (Centre for Ageing Better, 2022[32]):

• Help uncovering transferable skills to improve confidence in moving into new industries

• Empathy for circumstances and a holistic view of the person’s life, not just their qualifications

• Support from people who understand their needs, industry and aspirations

• Education and training information in one place

• A mix of local online and face‑to-face training

• The ability to try a job before applying, to see if it is suitable for both employee and employer

The project also found that people were hesitant to access mainstream support and wanted a degree of autonomy in their journey. Therefore, it is important to involve local services and individuals with lived experience in the project’s development, delivery, and evaluation. While the results from the evaluation of the pilot in Manchester wait to be seen, the insights gained from the co-creation process are consistent with many of the insights found in other studies of over 50s support (see for example Parsons and Walsh (2019[27])).

The tax and transfer system as well as playing a key role in redistributing income across households and the same households over time, also as a role to play in supporting social mobility. Effective out-of-work and in-work benefits can help people recover from economic hardship, reduce income volatility, and prevent long-term benefit dependency, while encouraging upward mobility and a return to employment. However, tax systems can also contribute to amplifying income disparities over time rather than smoothing income volatility.

Out-of-work benefits in the United Kingdom provide insufficient protection for those facing unemployment. Workers in the United Kingdom experience larger income losses compared to most other OECD countries, especially Western European economies (OECD, 2018[33]). Public spending on unemployment benefits as a percentage of GDP is among the lowest in the OECD (Figure 2.4, Panel A) and basic unemployment support replacement rate is only 14% of average earnings (after six months) (Panel B). In contrast to many European countries, unemployment benefits do not provide a percentage of previous earnings, and there have often been periods when benefit freezes have meant that benefits have not been uprated with inflation.

Low unemployment benefits contribute to a labour market in the United Kingdom characterised by high insecurity and declining dynamism. While some claim these benefits support a flexible labour market, the job market has become less dynamic, with fewer job moves and sectoral reallocations, contributing to stagnant productivity (Brewer and Murphy, 2023[34]). Workers are less likely to take risks or switch jobs due to fear of the financial shock unemployment would cause, especially with inadequate unemployment insurance. More generous unemployment benefits could improve job market dynamism, productivity, and protect workers’ living standards, enabling them to pursue better opportunities without fear of financial insecurity. There is strong evidence that a well-designed unemployment insurance scheme can lead to productivity gains by enabling unemployed individuals to secure better jobs, either through higher subsequent wages or longer job duration (Eeckhout and Sepahsalari, 2024[35]; Farooq, Kugler and Muratori, 2020[36]; Nekoei and Weber, 2017[37]). Such improved “job matching” is inherently more advantageous than pushing workers into “any job”.

Many proposals exist to redesign the unemployment insurance scheme that would likely boost job market dynamism and productivity and help protect workers’ living standards. For example, Brewer and Murphy (2023[34]) propose replacing Contributory JSA with a modernised unemployment insurance system. The new system would provide wage insurance, covering 65% of previous earnings up to a cap of GBP 2 260 per month for up to three months, which would increase the maximum weekly payment from GBP 84.80 to GBP 339. To protect low-income households, unemployment insurance would be treated like earnings under Universal Credit, reducing Universal Credit payments by 55 pence per pound earned. This approach contrasts with the current system where JSA is deducted pound for pound, offering no incentive for low-income workers to claim it. Unlike the current JSA, which has complex eligibility rules, the new scheme would be accessible to all employees who have worked for at least 12 months.

Successive reforms to the benefit system since the 1990s have contributed to higher employment, with reforms also generally increasing the financial incentive to shift from unemployment to part-time work (Hoynes, Joyce and Waters, 2024[38]). Yet these reforms have often pushed claimants into low-paid, part-time work, where they remain for extended periods while still receiving in-work benefits, due to limited career progression in part-time roles. Reform of the welfare system needs to consider the long-term impact on wage growth and career progression. One drawback of encouraging part-time work over full-time work is that it can lead to lower future wages (Hoynes, Joyce and Waters, 2024[38]). The current approach does not appear to be leading to improved outcomes for people who are in receipt of unemployment related benefits. The proportion of people moving from unemployment related benefits into work each year has fallen from around 30% in 2014‑15 to 20% in 2021‑22 (Figure 2.5).

In the United Kingdom there has been a strong push to increase conditionality in welfare policies embodied in a “Work First” strategy which prioritises getting unemployed individuals into any job as quickly as possible (Jones and Carson, 2024[40]; Brewer and Murphy, 2023[34]; Tomlinson, 2024[39]; Wilkes et al., 2023[20]; Welfare Conditionality Project, 2018[41]). This approach is enforced through financial benefit sanctions, often with minimal support offered, and in-work conditionality has arisen because of the introduction of Universal Credit in 2013. Universal Credit is now the main working-age benefit for both those who are out of work, or in work on a low income. The focus is on reducing benefit dependency, often without regard to the quality or suitability of the job for the individual. DWP presents the policy as an “ABC” approach – “Any Job” which should lead to “Better Job”, and eventually to a “Career”. However, early trials and guidance on what the DWP portrays positively as its “In-Work Progression” policy indicate that, in practice, a more accurate description would be “Work First, then Work More”, as conditionality continues to be the primary mechanism (Jones, 2022[42]). Evidence shows that the path to securing a job is becoming more difficult due to an overemphasis on monitoring and compliance (Tomlinson, 2024[39]; Welfare Conditionality Project, 2018[41]; Pollard, 2023[43]). Cross-country evidence finds that “while sanctions tend to increase exits to employment in the short term, there is evidence of adverse impacts on job quality, job stability, earnings and income, and of increased exits to non-employment or inactivity” (Pattaro et al., 2022[44]). DWPs own research shows that sanctions reduce the rate of exit into higher paid work and have almost no effect on exit into some kind of work. For those who do exit into work, sanctioned claimants earn on average GBP 34 per month less than non-sanctioned claimants over a 6‑month period (Department for Work and Pensions, 2018[45]). Financial incentives do matter, and some conditionality is needed. However, there is a need for a shift in emphasis away from conditionality to support.

Supporting people into good jobs requires genuine engagement, particularly for those facing additional barriers to work such as health constraints (discussed further in Chapter 3). This process may involve nurturing a person’s confidence, helping them bounce back from setbacks, and equipping them with fresh skills. However, pushing individuals to take any job available through inflexible conditionality and sanctions with inadequate social security can undermine these efforts. This limits the opportunities for individuals to find a good match with their employer, undermining opportunities for sustained employment and better jobs. Up until recently, jobseekers had three months to search for positions similar to their previous employment. However, starting in 2022, this window has been shortened to just four weeks, after which most claimants must apply for any job that offers at least the minimum wage and is within a 90‑minute commute (Tomlinson, 2024[39]). Since 2013, Universal Credit regulations have also required claimants to dedicate 35 hours a week to job applications.

Engagement with employers is also crucial to support better job matching, yet the current approach is limiting Jobcentres ability to engage with employers (Jones and Carson, 2024[40]; Jones and Carson, 2023[46]). Just one in six employers used a Jobcentre over the last two years to recruit (Institute for Employment Studies, 2024[19]), and many employers are critical of the “work first” approach. This can generate a large amount of inappropriate applications due to people applying for jobs to show to their Work Coach that they have applied for a job (Jones and Carson, 2023[46]). Research with employers found that in general they preferred a strategy that focused more on helping candidates find positions that suited their skills, abilities, and personal situations (Jones and Carson, 2023[46]). Employers want to hire people who both a) are genuinely interested in working for them and b) have the capability to do so, considering not only the required skills and qualities but also practical factors like childcare and transport that may affect their ability to fully commit to the job.

Reforms to Jobcentres should emphasise a shift towards supporting unemployed individuals in finding sustainable employment, with less focus on benefit administration and enforcing rigid claimant commitments. A “joint commitment” between claimants and work coaches could set mutual expectations, offering tailored support such as personalised training or job guarantees for those who struggle to find work (Tomlinson, 2024[39]). Conditionality could be minimised at the outset, allowing an initial period to build trust and understand individual employment goals. Conditionality would only be introduced as a backstop after multiple failed attempts to engage, ensuring accountability while prioritising genuine support and engagement (Pollard, 2023[43]). This approach would encourage flexibility, allowing claimants to engage in realistic job-search activities and reducing punitive sanctions that hinder job-seeking efforts. Furthermore, the reforms should focus on helping claimants secure roles that align with their skills and preferences, moving away from an “any job” mentality. To improve effectiveness, the Jobcentre’s employment services should be separated from benefits administration, allowing work coaches to concentrate on meaningful guidance and support (Tomlinson, 2024[39]).

The United Kingdom has a weaker evidence base on “what works” in employment programmes compared to some other countries such as the United States. While the United Kingdom has made progress in evaluating government programmes over the past decade, evaluations remain inconsistent, especially at the local or devolved government level. Challenges include a lack of impact evaluations designed from the outset and limited access to data and expertise. Much of the evidence that is collected is often isolated, focusing on single programmes often at the pilot stage or on specific aspects of interventions. Additionally, impact evidence frequently relies too heavily on qualitative or non-controlled quantitative research. There is also very little comparative analysis across programmes. There is a need for a more co‑ordinated approach to evidence generation, such as that generated by the network of “What Works” Centres. None of the What Works centres are focused on employment and labour market polices, although the What Works Centre for Local Economic Growth covers some elements of labour market support such as skills training and apprenticeships.7 Consistently collecting data across programmes, particularly using new job quality measures (such as those collected by the ONS), would help better understand what supports people in securing good-quality work.

Lifelong learning is crucial for individuals to develop the skills necessary for the future and adapt to a rapidly changing job market and diverse career paths, and a key aspect of supporting career adaptability. With the increased likelihood of individuals changing jobs frequently and moving in and out of learning phases throughout their lives, it becomes necessary to have opportunities to upgrade current qualifications and acquire new skills continually. As digitisation expands, careers in science, technology, engineering, and many other areas are emerging and evolving. To meet these demands, countries must provide learning opportunities for people of all ages, enabling them to continuously update and refine their skills for smooth career transitions. Additionally, providing mechanisms for individuals to validate their professional experience with official qualifications ensures that their expertise is recognised and valued. Strengthening the connections between education, work, governments, and social partners is fundamental to aligning skills development with the workforce’s needs.

For both employed and displaced workers, a common barrier to mobility is the lack of transferable or specialised skills required in new industries. Low skilled workers have smaller effective labour markets compared to high skilled workers, constraining their outside options. For example, workers displaced from “brown” sectors, such as the steel industry or heavy engineering, may struggle significantly to transition to roles in new technology firms. This challenge is particularly acute for late career individuals who often exhibit lower levels of digital readiness and participate less in adult learning programmes, hindering their ability to capitalise on job growth in sectors urgently seeking additional staff. These issues are further compounded by advancements in artificial intelligence (AI), which have the potential to reshape task compositions across both high- and low-skilled occupations.

In the United Kingdom skill shortages are particularly evident in industries where employers require higher-level or specialised skills, such as white‑collar professions, public services, manufacturing, and construction. More employers are reporting having a skill-shortage vacancy (SSV) – defined as a hard-to-fill vacancy due to a lack of skills, qualifications or experience among applicants (Figure 2.6). In 2022, 10% of employers had a SSV, and the overall proportion of vacancies that are skill-shortage vacancies increased to 36% in 2022 from 16% in 2011 (Department for Education, 2022[47]). This suggests that individuals entering or re‑entering the workforce, as well as those seeking to change job or career may need to undergo some reskilling.

Skills and labour shortages are compounded by labour market segmentation in the United Kingdom which tends to divide the workforce into distinct segments, often characterised by disparities in job security, wages, and career progression opportunities. This segmentation can lead to skills shortages, as workers in lower-tier segments may lack access to training and development, limiting their ability to fill roles in higher-demand areas. Enhancing job mobility is crucial in addressing these shortages; by facilitating transitions between segments, workers can acquire new skills and experience, thereby reducing mismatches between labour supply and demand. Addressing segmentation would require targeted policy interventions aimed at improving training access and supporting career transitions for those in vulnerable employment positions.

The skills system in the United Kingdom has undergone multiple reforms, consequently, the policy landscape has become cluttered and frequently changes.8 This continuous “chopping and changing” creates difficulties for individuals and employers trying to navigate the post‑18 education system. Not only are there trade‑offs due to the fiscal costs of publicly funded skills training, there is also a potential cost to more change and instability from further major reforms.

International evidence suggests that a balanced approach between structure and flexibility is crucial in designing effective skills systems. The Netherlands serves as a notable example, excelling in education, training measures, and staff development. Their Vocational Education and Training (VET) system effectively combines clear guidance on training opportunities with adaptable training options. This integration helps to align learning systems with evolving skills requirements. Within the Dutch system, there are two pathways that seamlessly integrate and offer flexibility based on employer demand. This high degree of system flexibility also contributes significantly to labour market agility. In contrast to the United Kingdom, the Netherlands places a stronger emphasis on providing broad educational foundations that support young people in entering various career paths while gaining practical work experience. This approach allows for later specialisation in specific occupations or careers after a period of general learning.

Research conducted by the CBI and Universities UK highlights the importance of flexible learning in preparing the UK workforce for future challenges (Lyons, Taylor and Green, 2020[48]). Greater flexibility in learning opportunities enables a more responsive approach to evolving skills demands and facilitates continuous skill development throughout individuals’ careers. For instance, modular programmes designed to accommodate part-time workers or allow learners to enhance existing qualifications are effective examples. Overcoming time and location barriers to training participation suggests that designing flexible, modular, or bite‑sized learning options that can be integrated into work and personal schedules will be essential for upskilling and reskilling the workforce. Several countries are acknowledging the necessity of enhancing the flexibility of vocational training to meet the upskilling and reskilling demands of adults. In Norway, for instance, the forthcoming Education Act, effective from August 2024, strengthens adults’ rights to complete VET programmes and access reskilling opportunities. This legislation aims to establish more adaptable pathways for adults within the VET system (OECD, 2023[8]).

Advancements in digital technology present significant opportunities for innovative learning approaches. Expanding access to online or blended learning, which combines online and classroom-based instruction, can enhance flexibility. Similarly, increasing training availability outside of traditional working hours can further support accessibility. Additionally, self-directed learning, peer-to-peer collaborations, and networked modules represent additional elements of a more adaptable learning framework.

The United Kingdom has low and declining firm investment, including limited employer-provided skills training, and has seen a marked drop in adult education and training participation compared to other countries. Since the early 2000s, the number of publicly funded qualifications initiated by adults has fallen by 70%, from nearly 5.5 million to 1.5 million by 2020 (Tahir, 2023[49]). While the overall participation in employer-provided training has remained relatively stable, the average number of days of workplace training per employee in England has dropped by 19% since 2011 (Tahir, 2023[49]). The decline in UK training provision raises concerns due to potential market failures, such as borrowing constraints and uncertainty about training returns, which justify government intervention. However, the reduction might also reflect a correction from previously suboptimal training levels or the elimination of ineffective subsidies. Job-specific training is the most common type of training that employers provide to staff, mentioned by 84% of employers providing training in 2022, while 71% report providing health and safety/first aid training (Figure 2.7).

Participation in training decreases with age, with mid-to-late career workers less likely to engage compared to younger counterparts. PIAAC (Programme for the International Assessment of Adult Competencies) data from 2015 reveals that 55.2% of workers aged 35-44 participated in training over the past year, while only 31.8% of those aged 55-65 did (OECD, 2023[50]). However, this is still above the OECD average of 23.9% for the same age group.

On the positive side there are some sectoral level training and retention schemes such as in engineering, construction, or the NHS in England. Employers can play a stronger role in providing training, including at the sectoral level which has proven effective in other countries (Katz et al., 2022[51]).

Firms tend to provide less training to older workers compared to younger ones, partly because training older workers is more expensive, as the opportunity cost is higher, and employers might expect older workers to stay in their roles for a shorter period. However, it is essential to separate the impact of age from tenure. Younger workers usually change jobs more frequently than older workers, so the return on investment in training them is not necessarily higher. Moreover, longer working lives provide more time for older workers to benefit from training. Uncertain returns may also lead employers to offer suboptimal levels of training. Improving the impact of training could alter this dynamic. Many employers in the United Kingdom may also have difficulties accessing the right training (Department for Education, 2019[52]). Finally, a lack of flexibility in training provision can also make it difficult for employers and employees to take up training.

In the face of rapid advances in AI, training is especially critical for mid-to-late career workers, who may face unique challenges in adapting to the evolving demands of an AI-driven job market. As AI technologies reshape the tasks within many occupations, reskilling and upskilling initiatives become essential to help older workers maintain their employability. Training programmes tailored to the specific needs of older employees – addressing both technical skills in AI tools and softer skills like adaptability – are likely to support this demographic in adapting to new, AI-enhanced roles. However, without proactive measures, older workers risk being left behind, especially in high-skill occupations where the use of AI tools is becoming integral to productivity.

To address this need, companies and policy makers are encouraged to invest in accessible, flexible training programmes that align with older workers’ learning styles and work schedules. This may include blended learning approaches that combine in-person support with digital tools, enabling gradual skill acquisition and building familiarity with AI-driven processes. By providing targeted support, firms can help older workers transition into roles where they leverage AI to complement their existing expertise, thus fostering a more inclusive labour market that distributes AI’s productivity benefits more equitably. Evidence shows that employers in the United Kingdom and other countries are expanding the use of AI tools. In a recent survey of employers carried out by Generation, 36% of employers in the United Kingdom currently provide AI tools In the United Kingdom, and 37% say that they have no plan to provide AI tools in the next 12 months (Generation, 2024[53]). Further, the majority of companies who have rolled out AI tools are providing some sort of training support to their employees, most commonly this takes the form of self-service resources or training by a peer or manager (Figure 2.8). Skills Bootcamps (discussed below) are an example of government policy in the United Kingdom to improve digital skills.

Funding for education and training of over 18-year-olds comes from two main sources: student fees and loans, and the apprenticeship levy. Higher education is funded by fees, for which students can access income‑contingent loans. Apprenticeships also play a crucial role in adult education and training, offering individuals the chance to gain both work experience and training. While modern apprenticeships were introduced in 1993, they were initially limited to adults under the age of 25 until 2004. In 2017 the introduction of the apprenticeship levy radically changed how they are funded. The apprenticeship levy, paid to HMRC through PAYE, is set at 0.5% of company pay bills above GBP 3 million. In England, the majority of the revenue is used to subsidise the cost to employers of providing apprenticeships, while the other UK nations spend the funds raised through the levy on a broader range of skills programmes.9

There are several issues with the way that the (new) apprenticeship system is currently operating. The average age of an apprentice has been steadily rising and this has led to concerns that older workers are increasingly crowding out younger workers. Prior to 2007 there were no apprenticeship starts in England over the age of 25, since then starts have largely been driven by this age group (McNally, 2018[54]). There has also been a shift from lower to higher apprenticeship levels, and individuals over 25 account for the majority of those undertaking higher apprenticeships (at Levels 4 and 5) (Cavaglia, McNally and Ventura, 2022[55]).10 There are concerns that this has introduced a higher deadweight cost, as this might include substantial numbers of existing employees doing continuous professional development which is now financed by the apprenticeship levy and would have previously been funded directly by employers (Layard, McNally and Ventura, 2023[56]). However, assessing the full extent of this phenomenon remains challenging. Patrignani et al. (2021[57]) found no evidence that apprenticeships under the Apprenticeship Levy reduce publicly funded training in other areas.

Evidence shows that SMEs also often struggle to make use of apprenticeship levy funds. They can claim levy funds, but the amount is capped (Tahir, 2023[49]). The result is that only 41% of apprentices are in SMEs, compared with 61% of all employees (Layard, McNally and Ventura, 2023[56]). Because the overall amount of funding for apprenticeships is capped, rather than being demand led, there have often been rationing of support to SMEs (Layard, McNally and Ventura, 2023[56]; Mansfield and Hirst, 2023[58]). In contrast, apprenticeship training is nearly free for large employers, encouraging them to choose apprenticeships over other training options. Arguably other types of employer-provided training are often more specialised, concentrating on skills directly related to a company’s operations. This specialisation, benefiting the employer directly, might imply a lesser need for subsidies. Further, there are many non-apprenticeship training programmes that also build general skills, which could be more practical for businesses than apprenticeships.

The new government plans to allow companies to use up to half of their levy contributions for non-apprenticeship training under a reformed “growth and skills levy.” This change would mandate that at least half of the levy funds still be allocated to apprenticeships but would offer more flexibility than the current system. This adjustment would align England with other countries, as training levies are common globally, though only Denmark and France have levies specifically for apprenticeships (Kuczera and Field, 2018[59]). However, this plan would see large companies keeping and spending more of the levy money internally, with even less going towards technical apprenticeships for young people (Wolf, 2024[60]).

The apprenticeship levy could be recast as a lifelong learning levy as the language of apprenticeships is problematic for mid-to-late career workers. The term “apprenticeship” has a strong association with low pay and entry-level positions, language such as upskilling, retraining, and on-the‑job training is more likely to engage late career workers (Phoenix Insights, 2022[61]). The core idea of an apprenticeship is to introduce young people to the workforce with appropriate training. To this end more of the levy should be ring-fenced for younger people, with the focus of apprenticeships on the transition to the labour market. One way to release funds for younger apprentices doing courses at Levels 2 and 3 would be to fund degree apprentices out of the standard fees and loans model used for higher education (Willetts, 2023[62]). However, funding for apprenticeships should also follow the Robbins principle which guides higher education, meaning that qualified people who wish to progress further should be able to find a place.11 This also means that places need to be made available for qualified under 25‑year‑olds in non-levy paying firms. The proportion of non-levy paying firms could be reduced with a smaller levy paid by more companies (Wolf, 2015[63]; Wolf, 2024[60]), similarly to systems in countries like Denmark and Austria. Employers who hire apprentices would receive subsidies from this fund, significantly exceeding their individual contributions.

The idea of expanding the apprenticeship levy depends on whether it would effectively promote additional, productive training. While some research indicates that employer-provided training generally increases productivity and wages, the evidence is limited, especially outside apprenticeship schemes (Dearden, Reed and Van Reenen, 2006[64]; Méndez and Sepúlveda, 2016[65]). For instance, an additional period of such training in the United Kingdom is associated with a 0.7% wage increase (Méndez and Sepúlveda, 2016[65]). However, the returns on different types of training vary greatly, making the type of subsidised training crucial. There is also significant evidence that subsidising employer-provided training often results in a high level of “deadweight loss,” where subsidies do not lead to additional training but rather replace existing employer-funded training (Leuven and Oosterbeek, 2004[66]). For example, Train to Gain, largely substituted training that employers would have provided without public support (National Audit Office, 2008[67]). Thus, expanding the apprenticeship levy risks funding training that would have occurred regardless.

At most, a small share of the levy, Mansfield and Hurst (2023[58]) suggest 25%, should be used for employer-relevant skills training aligned with occupational standards, delivered through regulated institutions like colleges, universities, or training providers. Eligible programmes would include Bootcamps, T-Level placements, and other higher technical qualifications related to shortage occupations. The Migration Advisory Committee (MAC) publishes a shortage occupation list which could be used by IfATE (Institute for Apprenticeships and Technical Education) to identify qualifications at Levels 2‑5 that need supporting.

To better align skills training and apprenticeships with local and national growth plans, the government should integrate workforce planning into major investments, such as infrastructure projects and green initiatives. For instance, achieving housing targets or meeting net-zero goals, like heat pump installations, requires a skilled workforce, which depends on visible job prospects to encourage people to train. This approach could also involve local governments actively promoting apprenticeships, incorporating apprenticeship requirements in public procurement, and potentially having more control over non-levy apprenticeship funding, especially in regions with devolved adult education budgets. Local Skills Improvement Plans could also help direct levy funds to address specific regional skill needs and priorities.

Additionally, there may be a case for channelling public skills funding toward enhanced business support services for SMEs, particularly micro and small firms, helping them improve management capabilities and engage with training providers to increase productivity. To reduce pressure on the levy budget, employers could be required to contribute significantly more towards higher apprenticeships for adults aged 25 and over. For example, for apprenticeships at Levels 4‑5, employers could fund 50% of the costs, and for Levels 6‑7, they could fund 75%, using non-levy funds. Public funds would continue to support apprenticeships for younger individuals and for older adults at lower skill levels.

Other incentives could be used that would allow a wider range of types of human capital investment that that enabled by apprenticeships. Apprenticeships are substantial and extensive skills development programmes, which may not suit the needs of all workers, particularly late‑career workers who may only need a small “top-up” to progress further in their existing job or change career. Only a minority of employers in the United Kingdom train apprentices; 11% had staff currently undertaking an apprenticeship in 2019. For example, incorporating incentives within the tax system, like those currently supporting R&D investments, could boost firms’ investments in enhancing the skills of their workforce.

The United Kingdom incentivises capital expenditure through mechanisms like depreciation allowances, while taxing labour via income tax and national insurance. As a result, businesses are encouraged to prioritise investments in capital over labour, yet the reasons for government support of investments in both R&D and workforce training are similar – both are crucial for economic growth (Costa et al., 2018[68]). Rebalancing the tax system to give equal weight to human and physical capital could encourage firms to invest in upskilling workers (LSE Growth Commission, 2017[69]; Costa et al., 2018[68]). Firm tax incentives apply to deductions, exemptions, or credits for costs employers incur to train their employees. In the United States, Fitzpayne and Pollack (2018[70]) propose a Worker Training Tax Credit which would cover 20% of new training costs for non-highly compensated workers (earning less than USD 120 000 annually). Modelled after the R&D Tax Credit, businesses would set a base level of training expenses, averaged over the previous three years, and the credit would apply to the excess spent above this base. Eligible training includes programmes leading to industry-recognised credentials or authorised under the Workforce Innovation and Opportunity Act. Small businesses (with less than USD 5 million in receipts and no older than five years) can use this credit against payroll taxes, capped at USD 250 000 annually, and against the Alternative Minimum Tax.

Skills Bootcamps are free training programmes introduced in England in 2020 in collaboration with local employers to address job vacancies. These courses are designed to support individuals in upskilling or reskilling, enabling them to move from roles in declining sectors with limited career advancement to emerging areas with skills shortages and greater opportunities for progression. Commendably they recognise that extensive qualifications such as Apprenticeships and Higher Technical qualifications are not required by experienced people changing careers, who instead need more targeted provision to enable their transitions. They are available to people in and out of work and typically take 12 weeks. Unfortunately, there has been no impact evaluation of the programme.

The Bootcamps address employers’ immediate skills needs by providing targeted training to fill current skills shortages, offering guaranteed interviews for roles aligned with the bootcamp’s skills (Garner et al., 2024[71]). They focus on industry standards and can quickly respond to emerging skills like green and digital. Self-employed participants or those sponsored by employers aren’t required to have job interviews. For employers hiring individuals from outside the labour force, there is no cost, but those training their existing workforce contribute 30% of training costs for large employers and 10% for small or medium ones (Garner et al., 2024[71]).

The quality of the Bootcamps is closely tied to employer-led design, high-quality teaching from industry-experienced trainers, and positive learner feedback. While the first two piliot waves generally reported high satisfaction and effective upskilling, issues emerged around the consistency of teaching quality and assessment practices (Garner et al., 2024[71]). Some courses lacked rigorous pre‑course assessments, and fully online formats without sufficient support led to poor learner experiences. Inconsistent credentials and outcomes across providers and waves were noted, with suggestions for more uniform curricula, particularly in areas like digital skills. Bootcamps are also supposed to include a guaranteed job interview with an employer, and in many cases this has not been happening. Older people typically do not want training per se, they want a job and therefore training needs to be linked to a concrete job opportunity.

A process evaluation of Skills Bootcamps has been undertaken by the Department for Education (Department for Education, 2023[72]), undertaking a robust empirical impact evaluation should be a priority. Suggestions have been made on ways to improve the Bootcamps, such as including better referral routes, stronger employer engagement, clearer outcomes, and alignment with occupational standards to support accelerated apprenticeships (Garner et al., 2024[71]). Greater employer – provider engagement throughout all stages of the Skills Bootcamp lifecycle was linked to improved outcomes and experiences for participants (Department for Education, 2023[72]). However, building strong employer – provider relationships can take time, and many may have been established well before the launch of the Skills Bootcamps initiative. There is an ongoing move towards standardisation, led by IfATE’s initiative for a simpler skills system, which aims to offer flexible, Level 3 specialised qualifications that quickly enhance existing skills (Garner et al., 2024[71]).

Starting in 2026/27, the Lifelong Learning Entitlement (LLE) is due to replace the current higher education student finance and advanced learner loans (ALL). The LLE will offer financial support for up to four years of post‑18 education, equivalent to GPB 37 000, for individuals up to the age of 60. An LLE loan will be able to be used for short courses, modules, or full courses at Levels 4 to 6, and a modular system will allow greater flexibility. This will replace Advanced Learner Loans / Higher Education Student Finance. The LLE will change post‑18 student funding in three ways (Lewis and Bolton, 2023):

Overall, these reforms should bolster the assistance offered to FE learners and increase the flexibility of the current student loans system. However, there are still significant uncertainties surrounding the LLE. Key concerns include which courses will qualify for the LLE and the mechanics of credit transfer (Tahir, 2023[49]). The government has stated that all courses currently financed through higher education student finance will be eligible, but qualifications funded through Adult Learning Loans (ALLs) will only qualify if there is clear demand from learners and endorsement from employers. This decision is still under consultation and is crucial for the LLE’s impact. Additionally, the credit transfer system remains undefined. The LLE aims to enable learners to take shorter courses across multiple institutions throughout their lives, necessitating a new system to record and transfer credits, which the government has yet to establish.

For late‑career workers, given that the assistance is in the form of a loan there is likely to be hesitancy in taking out a loan later in life. Research from Phoenix Insights finds that workers would only consider taking out a loan for training if an employer was offering them a job or promotion as a consequence (Phoenix Insights, 2022[61]). There is currently no clear policy on addressing the living costs for students enrolled in Level 4 and 5 courses which the LLE is designed to improve help access to. While university students have access to a maintenance loan, the Educational Maintenance Allowance for further education students has been entirely withdrawn. If resources allow, it would be beneficial to introduce some form of means-tested support for students at Levels 4 and 5.

How to encourage employers to contribute more to training costs appears missing in the discussion of the LLE. In fact, the LLE might unintentionally discourage employers from funding training, placing the onus largely on employees. To foster employer investment, clearer policies could be established, guiding where LLE funds should be used versus areas where employers should contribute. Employers could also be incentivised to support employees’ LLE‑funded training through work placements, curriculum collaborations, and financially supporting training by contributing to the direct costs or time of work for training. This would support a cultural shift where employers see employee training as a shared investment.

In England, higher and further education systems have emphasised three‑year full-time undergraduate degrees while neglecting part-time and lifelong learning opportunities. The Augar Review addressed this by recommending the introduction of funding credits aimed at supporting various forms of learning, including full-time, part-time, distance learning, and work-based study (Department for Education, 2019[52]). This proposal aims to enhance flexibility in funding structures, thereby promoting increased access to lifelong learning opportunities across different levels and types of education. In contrast, the Netherlands has implemented sectoral training and development funds (known as Opleidings-en Ontwikkelingsfondsen) in collaboration with social partners to help workers maintain and anticipate future skill needs. These funds are primarily financed through payroll levies as stipulated in collective agreements, enabling targeted support for ongoing skills development within specific sectors.

Given that it is increasingly likely that individuals will take a career break at some point for childcare, eldercare, or to support a partner in a job, return-to-work programmes can be effective in providing a source of talent and normalise the idea that people may leave a job for a limited time for personal reasons. Such programmes are not new – in 2008 Goldman Sachs and the consumer food products company Sara Lee offered the first corporate “returnships” – but recognising the potential of this untapped talent pool and driven by the need for diverse hiring, many companies have started offering return-to-work programmes (Cohen, 2021[73]). Companies have begun to challenge the misconception that individuals returning to work after a career break lack motivation. Many of these professionals possess a strong desire to re‑enter the workforce. However, they often struggle with diminished self-confidence due to their prolonged absence from professional life. These initiatives are specifically designed to support mid-career professionals who are re‑entering the job market after a break. They not only help participants rebuild confidence and re‑establish their professional networks but also assist them in reassessing career goals and acquiring new skills as they navigate their job search journey. In the United States this trend has been accelerated by collaborative efforts such as the STEM Reentry Task Force, which has partnered with numerous leading employers since 2015 to develop and implement these programmes effectively (Stem Reentry Task Force, 2023[74]).

Return-to-work schemes have been running in NHS England since 2014 to help people return to nursing, midwifery and general practice (NHS England, 2024[75]). Also, a Career Refresh for Medicine to support doctors who have taken a break. (Some NHS workers can retire at age 55. As is the case for many in the Fire and Police service).

Practices for an effective return-to-work scheme include (Cohen, 2021[73]):

In the United Kingdom, Career Returners is a social impact consulting, coaching and network organisation that has been operating since 2014, working with employers, career returners and the government to enable professionals to return to suitable‑level roles after an extended career break (Career Returners, 2024[76]).

Displaced workers, defined as those experiencing permanent economic dismissal after at least a year of employment, represent a significant portion of the workforce, with annual displacement rates ranging from 1% to 7% across OECD countries (OECD, 2018[77]). The income losses associated with displacement can be substantial. Older workers and those from blue‑collar backgrounds are particularly vulnerable, facing heightened risks of long-term unemployment and diminished wages upon re‑employment. Many displaced workers experience significant drops in earnings immediately following their job loss, with some countries reporting reductions of up to 50% in the year of dismissal (OECD, 2018[77]). Even four years post-displacement, earnings can remain approximately 10% lower than pre‑displacement levels.

Many workers are at risk from developments in artificial intelligence and the green transition and therefore policies are needed to mitigate earnings losses for displaced workers and support their job transitions. Recent research estimates the effects of developments in automation on employment in the United Kingdom. Research undertaken for BEIS suggests that around 7% of existing UK jobs could face a high (over 70%) probability of automation over the next 5 years, rising to around 18% after 10 years and just under 30% after 20 years (PricewaterhouseCoopers LLP, 2020[78]). A report for England suggests that approximately 12 million workers are in occupations projected to decline by 2035, with over a million jobs – especially in secretarial, administrative, sales, and elementary roles – at risk of disappearing in the next decade (Scott et al., 2024[79]). Many in these high-risk jobs have previously moved into unemployment or economically inactive states, and around 75% have shifted to other high-risk occupations, limiting future job opportunities. Skill mismatches are a significant barrier, as most workers in declining roles are only qualified to GCSE‑level, while growing occupations often demand higher qualifications. Workers in high-risk roles with higher qualifications are more likely to successfully transition to in-demand occupations (Scott et al., 2024[79]).

Automation creates new jobs and changes existing jobs in addition to removing jobs, but facilitating moves for workers at risk in their current job requires a range of measures. To mitigate the impacts of job displacement, proactive measures are essential. Effective income support schemes, like unemployment insurance and social assistance, help reduce income loss and allow workers time to find suitable roles or upgrade skills. However, more proactive measures, from rapid response initiatives during layoffs, to upskilling and reskilling initiatives are essential for enabling transitions to emerging industries and high-demand jobs. These can help reduce the impact and frequency of job displacement (OECD, 2024[80]).

Preventive strategies may include short-time work schemes that encourage employers to retain viable jobs during economic downturns. Early intervention services, such as rapid response initiatives during layoff notifications, can facilitate timely access to re‑employment resources and support. The Jobcentre Plus Rapid Response Service (RRS) is a support initiative aimed at helping workers and employers facing redundancy. The service provides early intervention for employees at risk of redundancy, facilitating access to job search assistance, training opportunities, and tailored support. Assistance is available to any employer considering redundancies, with proactive engagement when large‑scale job losses are anticipated. While the Rapid Response Service appears effective, a formal evaluation could provide valuable insights into potential limitations and areas for improvement.

Early planning can play a crucial role in implementing effective transitions for workers at risk of layoff. This is illustrated in the United Kingdom by the case of the closure of the last coal fired power plant (Box 2.7). The transition process was facilitated by an early policy announcement and an extended lead-in period before the closure date (Stewart, 2024[81]). Late‑career workers who have not switched job or occupation very much during their career will often need similar attention to make a move, even if their company or sector is not disappearing altogether.

Mitigating the effects of change also requires forecasts of future skill needs which is crucial for aligning the workforce with the rapidly evolving needs of the UK economy. This is a critical element of labour market information systems as discussed above. Forecasting enables the government, employers, and educational institutions to proactively address skill gaps, particularly in high-demand sectors such as digital technology, healthcare, green industries, and construction. Additionally, anticipating future skill requirements helps mitigate the challenges of technological disruption and demographic shifts, ensuring a resilient and adaptive labour market that supports high-quality jobs and economic productivity.

The skills forecast landscape in the United Kingdom is quite fragmented which complicates navigation, access, and usability for stakeholders (Frontier Economics and Pullen, 2024[82]). Without a centralised repository or best-practice guidelines, users struggle with locating, understanding, and evaluating diverse forecasts, leading to possible redundancies and inconsistent forecast quality. A key forecast is the Working Futures forecast which is being developed further as part of the Skills Imperative 2035 to include improvements such as a more detailed skills taxonomy (Frontier Economics and Pullen, 2024[82]). These and other developments appear likely to be taken forward by the new body Skills England (Department for Education, 2024[83]).

Recognition of prior learning (RPL) allows adults to accelerate their training by validating existing skills, both theoretical and practical, thereby focusing educational efforts on addressing remaining gaps (OECD, 2023[8]). In modular systems, RPL permits learners to potentially skip specific modules based on their experience, sometimes leading directly to obtaining a full qualification without additional training. This not only reduces the time and financial costs associated with acquiring qualifications but also incentivises continuous skill development among workers. Moreover, RPL supports the integration of migrant workers by assessing their skills through initial screenings, informing policy decisions and guiding their educational and career paths effectively. Recognition of prior learning can lead to several possible outcomes: i) admission into an education or training programme; ii) reduced programme duration in further studies; and iii) acquiring a qualification without a required training programme.

While RPL systems exist across tertiary institutions in the United Kingdom, standardising RPL procedures across all institutions could enhance transparency. Finland and Portugal have national protocols and information systems supporting RPL, ensuring consistency across vocational institutions (OECD, 2023[8]). Centralising RPL where possible prevents learners from repeating the process at different institutions; for instance, in Portugal, Qualifica Centres oversee RPL implementation. To ensure RPL’s credibility in the job market, it’s crucial to integrate existing qualifications and RPL processes with quality assurance systems. National qualification frameworks are instrumental in this, providing structure, defined credentials, and shared competence standards. Additionally, publishing detailed competence profiles for vocational courses or occupations can clarify the skills required for certification, aiding learners in understanding which skills can be recognised and validated towards a qualification. Ireland and Portugal exemplify this through their National Qualification Frameworks and competence standards for RPL activities (OECD, 2023[8]).

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