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Is it time to abolish compulsory retirement?

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Mark Easton | 18:14 UK time, Wednesday, 29 April 2009

The idea that workers should be forced to clear their desks and disappear, carriage clock under arm, on reaching the age of 65 is one that has its roots in a measure designed to reduce poverty and exploitation of older people. But now a committee of MPs fears that it may be achieving exactly the opposite, denying individuals the chance to top up inadequate retirement savings and unable to add to a meagre state pension.

The Work and Pensions select committee report published today demands that compulsory retirement be scrapped:

"We recommend that the Government removes regulation 30, which permits employers to continue to compulsorily retire employees at the age of 65. This regulation contradicts the Government's wider social policy and labour market objectives to raise the average retirement age and allow people to continue to work and save for their retirement."

There was some disappointment that this week's Equality Bill did not propose an end to mandatory retirement on the grounds that it self-evidently discriminates against workers purely on the grounds of age.

But there are more practical arguments put forward for its abolition.

population_projection_slide.png

This graph, which the Office for National Statistics produced last week, represents a stark challenge for our country. The gap between the two lines should terrify us. If we want to maintain standards of care for older people in the coming decades, something significant needs to change.

We could import young people to work and pay tax to support the elderly, but few are advocating substantial increases in immigration right now.

We could encourage young people to breed more, but that is unlikely to work.

We could significantly increase taxes, but that won't go down well with voters.

Or we could encourage older people to continue working and contributing to the national wealth if they wish to. It is not a complete answer, but it might help.

No-one is suggesting forcing those entitled to their state pension to keep working, but for those who wish or need to keep earning, why not?

Some argue that firms will be less able to rejuvenate themselves, to bring in fresh blood. There is concern that career progression will be blocked by more experienced staff refusing to move on. It could be that some older people will feel pressurised to stay working.

Charities campaigning for older people will have none of it. Michelle Mitchell, charity director for Age Concern and Help the Aged, says that today's report from the MPs "should be seen by ministers as the final nail in the coffin for the national default retirement age."

"This outmoded practice flies in the face of public opinion, established Government policy and the needs of the economy," she argues. "Government should act fast to get rid of it once and for all."

It is important to remember that the employer most enthusiastically implementing compulsory retirement is, of course, the government. The Department for Business told me:

"A number of employers are removing retirement ages and allowing more flexible working. We are confident that this will continue to increase. We are monitoring the default retirement age and are committed to reviewing it in 2011. If the evidence shows it is no longer necessary then we will remove it."

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