Number of long-term unemployed doubles

The number of long-term unemployed has more than doubled since the financial crisis struck in 2008, leaving tens of thousands of people with little chance of ever working again, according to the Institute of Public Policy Research.

More than 400,000 people have been unemployed for over two years – the highest number since 1997. Being out of work for two years or more severely curtails someone's chances of getting another job, according to a new report by the think tank to be published later this week. People lose their skills, fall behind in training and lose their confidence if they are out of work for too long, making them much less attractive to new employers.

The IPPR analysis shows that 100,000 older workers (those aged 50 and over) who were made redundant at the start of the recession could be forced to retire earlier than they planned. This means many will be left with significantly lower pensions and therefore lower standards of living, Tony Dolphin, the chief economist at the IPPR, says. But long-term unemployment has increased even more among younger people – trebling to 95,000 since 2008. Research from previous recessions suggests that members of this group are likely to earn less than their peers when they do find work and more likely to experience further unemployment in later life.

Mr Dolphin said: "The longer someone is out of work, the more they lose motivation and confidence. They also miss out on vital training and work experience. This means that even when employment starts to pick up again, they will find it hard to compete with other jobseekers and could find themselves permanently shut out of the jobs market.

"If we're going to provide decent services for our aging population and clear the deficit, we need as many people in work as possible to maximise tax revenues. We cannot afford to let so many people permanently drift away from the jobs market."