Plans to scrap retirement age

Posted on 30 Jul 2010 by The Manufacturer

The Default Retirement Age will be scrapped by October 2011 under proposals published for consultation by the Government yesterday.

Currently, an employer can force an employee to retire at 65 without paying any financial compensation. Anti-ageism groups have praised the plans.
“Everybody stands to win from scrapping forced retirement. People over 65 will have full employment rights for the first time. The economy will benefit from older workers’ precious skills and experience and their increased buying power” said Michelle Mitchell, Age UK charity director.
Activists argue that as people live longer and healthier lives, they should be entitled to the same job security as younger workers.
Pensions Minister Steve Webb said: “Many older people want to work after age 65 and have a wealth of skills and experience that are not being used. We want to get rid of the Default Retirement Age (DRA) so that if they want to work they can do so. By spending longer in the workforce they can also have a better pension in retirement.”
Although the Government is proposing to remove the DRA, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it. Examples could include air traffic controllers and police officers.
But some employers object to the plan. They say that scrapping the Default Retirement Age could make it more difficult to manage their workforce.
Graeme Leach, director of policy at the Institute of Directors, said: “We greatly regret the Government’s decision to abolish the DRA. We do not see how the removal of a mechanism that gives employers flexibility in managing their workforce is compatible with the Government’s stated desire to boost enterprise and de-regulate the employment arena.
“Instead of removing one of the few flexible mechanisms left to employers, the Government should be examining how it can make it easier for businesses to employ people so that jobs lost in the public sector can be replaced with jobs in the private sector.”

Lorenzo Spoerry