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Employers are worried about the practical impact of scrapping the default retirement age

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Leading employers have revealed their fears over next year's abolition of the default retirement age.

A survey conducted by Shoosmiths shows employers harbour real concerns about what will happen when the default retirement age of 65 is scrapped in October 2011.

The national law firm asked readers of its HR briefing, WortHReading, about retirement ages in their organisations, how they expected to deal with the abolition of the default retirement age and their concerns about the change.

Only 20% of those who took part in the survey worked in organisations that had already abolished retirement ages, with 80% still relying on a formal retirement age.

Respondents were evenly split when it came to predicting whether organisations were expecting a significant increase in those wanting to work beyond 65: 42% thought most employees would still want to retire at 65, with 41% believing more would want to stay on.

And only half of respondents thought their organisation would abolish retirement ages altogether, 20% thought that retirement ages would be kept for some but not for all roles, while 23% thought they would retain a retirement age for all roles.

Partner and head of employment Kevin McCavish said: "While this might suggest that next year’s legal changes will have a significant practical impact on employers and employees, the results reveal that the retirement age may not be pensioned off as quickly as predicted."

Employers’ main concerns were employees refusing to retire when they are no longer up to the job (75%), uncertainty of not knowing whether someone will be retiring or not (61%), increased difficulty of workforce planning (49%), negative effect on younger workers – lack of opportunity to progress/loss of motivation (43%), lots of older employees wanting to go part-time (42%), cost of providing benefits to older employees (40%) and increase in HR time dealing with older workers (26%).