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Scrapping default retirement age could be highly damaging to small firms, says Forum of Private Business

The Forum of Private Business (FPB) has called for the shelving of plans to scrap the default retirement age.

The Government has proposed removing an employer's option to retire workers when they reach 65, claiming the change will prevent an anticipated skills shortage.

But the FPB says, if the move goes ahead, it could prove highly damaging to thousands of small firms.

Currently, there is nothing to stop an employee working on past 65, providing his or her employer agrees to the move.

But the FPB believes this will prove a huge problem for thousands of small firms, hampering their abilities to plan for the future.

FPB chief executive Phil Orford said: "I don't think anyone would dispute the valuable contribution older workers make to the economy. With people living longer and healthier lives, the skills and experience older people can bring to the workplace are widely recognised.

"However, at the moment, there is nothing to stop anyone from working beyond 65, providing it suits both parties. The current law works perfectly well, so why tamper with it?

"By scrapping the default retirement age, all the Government will do is take yet more control away from business owners, add even more complexity to workplace law, and open the door to costly and painful employment tribunal cases."

The FPB has set out its views on the issue in response to a Government consultation process, which closed yesterday (Monday 1 February).

In its response to the consultation the FPB emphasised the need for small firms to be able to plan ahead, especially during times of economic uncertainty.

But the announcement comes as Chris Ball, the Age and Employment Network's chief executive, said: "Mandatory retirement is utterly unnecessary and causes untold damage to Britain's economy and the lives of people forced out of work when they are most vulnerable.

"Employers are beginning to realise that older workers can make the difference between success and failure. They should be encouraged to welcome older workers, help them stay in work and not to push them out of the door."