"Four generations of families where no-one has ever had a job"? Probably not, Mr Grayling

A new report highlights the rareness of intergenerational worklessness, as well as its undesirability.

The Joseph Rowntree Foundation has a new report out putting to bed the myth of "cultures of worklessness".

It's a powerful narrative, frequently voiced by members of the public, and occasionally – shamefully – repeated by government ministers who ought to know better:

We have got places where there are three generations of men who have never worked. If your grandfather never worked and your father never worked, why would you think work is the normal thing to do?

– Dame Carol Black, 2008

For too long, in too many deprived areas of the country, there has been a destructive culture that ‘no-one around here works’.

– Gordon Brown, 2003

... there are four generations of families where no-one has ever had a job. – Chris Grayling, Minister for Work and Pensions, BBC ‘Newsnight’, 15 February 2011

The most extreme version of the claim - that there were four generations who have never worked (in other words, the version spread by the Minister for Work and Pensions) –  seems to be entirely unsupportable. The JRF write:

Despite dogged searching in localities with high rates of worklessness across decades we were unable to locate any families in which there were three generations in which no-one had ever worked. [Emphasis theirs]

That's right – they can't even find three generations, let alone four. "Three generations of worklessness" is, by the way, a claim made by Iain Duncan Smith, Chris Grayling's boss. Also unsupportable.

The foundation was assured, at least, that there were families with two generations of worklessness, and even made an infographic detailing the evidence that they exist – even if they do make up just 0.09 per cent of the working population:

Unfortunately, even finding any of those families was tricky. In the end, the report had to settle for interviewing families with one generation in long-term unemployment, and a second which had never worked. With these, vastly reduced, criteria, they managed to find twenty families to interview about why they were in that situation. And what they found is that across the generations, people stressed the social, psychological and financial value of working for a living:

“It gives your whole day some sort of order. It’s like a regimental thing ... whereas if you are just sat around it can be frustrating and awful, really.”

Patrick Richards, 49, Middlesbrough

“I’ve always wanted to be able to say to somebody, ‘I work here’, ‘I’m going to my work’.”

Pamela Fraser, 21, Glasgow

“Of course it would be important to me [to have a job], especially when I’m only on £95 a fortnight. God, to have a wage that would be £95 a week; I would feel like a millionaire!”

Verity Lamb, 16, Middlesbrough

The research thus argues that, in so far as there is intergenerational worklessness, it is not due to a "culture" or "inherited attitude", but rather due to the calcification of long-term unemployment, and the existence of employment black holes.

It concludes:

that politicians and policy-makers need to abandon theories – and policies flowing from them – that see worklessness as primarily the outcome of a culture of worklessness, held in families and passed down the generations. If these cultures cannot be found in the extreme cases studied here, they are unlikely to explain more general patterns of worklessness in the UK.

We doubt the cabinet are listening.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/