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Retirement by default

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Mark Easton | 08:29 UK time, Tuesday, 14 July 2009

I am told government ministers have decided that the law which allows employers forcibly to retire workers who reach 65 is "no longer worth the candle".

society_all_ages226b.jpgThe Department for Work and Pensions has published its strategy for an ageing population [657Kb PDF], which includes a pretty strong hint that the "national default retirement age" will be killed off after a review next year.

In the foreword, the prime minister writes:

"Evidence suggests that allowing older people to continue working, unfettered by negative views about ageing, could be a big factor in the success of Britain's businesses and our future economic growth."

DWP Minister Angela Eagle also made the government's position clear:

"It is time to look again at this. Some people prefer to take early retirement, others prefer to keep working. We want to give older people flexible retirement options."
Ministers insist their change of heart is a response to a changed economic landscape. "As Britain's demographics change, it is sensible that we have the debate on what works for business and individuals. The retirement laws need to reflect modern social and economic circumstances," says Ms Eagle. But the employers association, the CBI, is unhappy, describing the move as "disappointing", especially at a time when so many businesses are under pressure.

Many companies use the national retirement age as an opportunity to take stock - to talk to an older worker about whether it is time to move on. Although bosses must consider a request from an employee to work on, currently they are under no obligation to agree. Once you get to 65, you can be told to clear your desk.

There are also concerns that a fixed layer of older, often more expensive workers might prevent younger job-seekers from getting into work.

age_concern_report226.jpgThe government's change of heart follows a long-running battle in the courts in which Age Concern has challenged the national default retirement age as discriminatory. The charity took the case to the European Court of Justice and the challenge continues this week at the High Court.

In an unusual step, the court has agreed that the Equality and Human Rights Commission can intervene.

The government will continue to contest that case but should it lose, hundreds of people who are challenging their enforced retirement will then go ahead.

Age Concern says:

"Older workers make a huge contribution to the economy and will have the skills and experience needed to boost recovery as we come out of recession. Many older people want to be able to continue to work beyond 65. For some this is because they need to boost their pensions or simply pay the bills, but for many it is because they love their jobs and see no need to stop working when they can still do them well."

If the law does change, it won't mean anyone must work past 65, nor will it mean people won't be able to claim their pension. But hundreds of thousands will see it as the chance to keep active, to keep contributing and to keep earning.


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