Early retirement to be outlawed
LEGISLATION designed to outlaw fixed retirement ages will mean most people will work at least until they are 65. Ministers announced today that a fixed retirement age will be 'consigned to the past', but added it will bring forward legislation to set a 'default' retirement age of 65.
Currently firms can set whatever retirement age they like, with many people stopping work at 60 or even younger. But under the new reforms, retirement ages below 65 will be allowed only if they can be shown to be necessary.
The Government is also creating a new right for people to work beyond the compulsory retirement age, which employers will have a duty to consider.
The new proposals will be implemented by October 2006 as part of a new European employment directive, which is also aimed at cracking down on age discrimination in the workplace.
'The right to request working beyond retirement age will help to engender a real culture change, taking us towards a world where fixed retirement ages are consigned to the past,' said Trade and Industry Secretary Patricia Hewitt.
The minister said that age discrimination was the 'last bastion' of unfair discrimination in the workplace which the Government was committed to tackling.
'We have listened to strong representations arguing that many companies still rely on a default age for business planning purposes and there is a danger that without one there could be adverse consequences for occupational pension schemes and other work-related benefits.'
Ms Hewitt said people would not be forced to work longer, adding that the default age was not a statutory, compulsory retirement age.
Employers will be free to continue employing people for as long as they were competent.
Work and Pensions Secretary Alan Johnson said: 'We want to establish a real change of culture in the workplace where people are judged on their skills and talents rather than their age.
'By taking action against retirement ages below 65 we offer workers clarity and more choice. They will know that the law stands behind their right to continue working to 65.'
