29/07/2010

Fixed Retirement Age To be Scrapped

The Government is set to scrap the fixed retirement age of 65 from October 2011 to encourage people to work for longer.

The new plans allow for a six-month transition from the existing regulations, following the announcement in the Budget that the default retirement age would be phased out from April 2011.

Currently, employers can make staff retire at 65, regardless of their circumstances.

With the fixed retirement age removed, there would be no need to keep employees 'right to request' working beyond retirement or for employers to give them a minimum of six months notice of retirement.

However, 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.

Employment Relations Minister Edward Davey said: "With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving swiftly to end discrimination of this kind.

"Older workers bring with them a wealth of talent and experience as employees and entrepreneurs. They have a vital contribution to make to our economic recovery and long term prosperity."

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 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."

The announcement has been welcomed by the Employers Forum on Age and charity Age UK.

The consultation also asks whether the government could provide additional support for individuals and employers in managing without the fixed retirement age or statutory retirement procedure. This includes the possibility of future guidance or a more formal code of practice on handling retirement discussions.

Views are also being sought on whether removal of the fixed retirement age could have unintended consequences for insured benefits and employee share plans.

The consultation is open from today until October 21, 2010.

(KMcA/BMcC)

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