Work till you drop?
By politics.co.uk staff
Employers will not be able to force 65-year-olds to retire from October 2011, the government has announced, giving older people the opportunity to continue working as long as they like.
A consultation launched by the government today proposes phasing in the demise of the default retirement age (DRA) by October next year. Chancellor George Osborne had announced in the Budget the move would be introduced from April 2011.
The announcement has met with mixed responses. Charities like Age UK have welcomed the move, saying it will free up older people’s skills and experience.
Businesses have reacted more cautiously, however, arguing that the existing framework had worked effectively. Today’s consultation will assess whether the scrapping of the DRA will have adverse effects on insured benefits or employee share plans.
“The decision to abandon the DRA leaves business with many unresolved problems, and the government’s timetable to scrap it will give companies little time to prepare,” the CBI’s deputy director-general John Cridland said.
“Scrapping the DRA will leave a vacuum, and raise a large number of complex legal and employment questions, which the government has not yet addressed.”
Ministers insisted the ending of the DRA would help older people make a “vital contribution” to society, however.
“With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age,” employment relations minister Ed Davey said.
“We want to give individuals greater choice and are moving swiftly to end discrimination of this kind.”
Pensions minister Steve Webb pointed out: “By spending longer in the workforce they can also have a better pension in retirement.”
Not all job sectors will be affected by the move. The government is prepared to consider allowing individual employees to continue to force employees to retire at a certain age, but must justify doing so.
