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Review of default retirement age brought forward to 2010

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The Government has decided to bring forward its review of the default retirement age by a year, meaning it will take place in 2010 rather than 2011.

According to the BBC, Gordon Brown, the prime minister, said: "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."

Currently employers are permitted by law to retire staff when they turn 65, but the review could mean that, given the ageing workforce in the UK, this will change.

Denise Keating, chief executive of leading campaigners the Employers Forum on Age (EFA), said: "We are absolutely delighted the Government has finally listened to reason and taken action to tackle an archaic system that allows the enforced retirement of people simply because of their age.  

"Every year thousands of people over 65 make huge contributions to the UK's economy and heritage, but despite being capable of continuing in work, many more individuals are involuntarily retired at 65.  We believe only short-sighted organisations would risk removing talented people just because a milestone birthday is approaching.  

"These economic times create an even more pressing imperative for the Government to move faster on this issue.  Pensioners need to work now because they have seen the financial crisis drain their pension value and as Britain becomes an ageing society, with huge demographic change, we are facing an even greater pensions crisis that will affect all of us."

John Ball, head of defined-benefit pension consulting at Watson Wyatt, said: "It's by no means the case that all employers enforce mandatory retirement ages. One in 10 men over 65 are still in work, and this number was rising sharply until the recession stopped even the biggest employment growth areas in their tracks.
 
"Telling people they will be allowed to postpone their retirement is the easy bit for politicians. The hard bit is telling them that they will probably have to. The public finances have deteriorated since the Government last reviewed what level of state pension provision was affordable and the closure of final-salary pension schemes has accelerated.
 
"A headache for HR departments in the future will be how to manage people who turn up at work feeling miserable because they want to retire but can't afford to. In the long term this could make employers more willing to provide good quality pensions and more nervous about taking on older workers who have little by way of pension provision from their previous employers.  
 
"If mandatory retirement ages are scrapped altogether, employers will have to grapple with the implications for health and risk benefits like life insurance and medical cover. It can be difficult to obtain appropriate cover for older employees under traditional insurance models, but withholding these benefits on grounds of age may not be permitted."

But Charlie Mullins, managing director of Pimlico Plumbers, said: "Of course older people should be allowed to continue working as long as they are capable. They should have the choice - why should they be forced to leave their job when they still have the desire, ability and drive to get to work and make a meaningful contribution? To force them to stop working just because of their age is nothing short of discrimination and contradicts the very law that was brought in to counteract that.
 
"They have a lot of experience and skills to offer, where's the sense in saying to someone who's an asset to your company ‘Sorry you've got to pack it in because you're too old'?"