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30 Jul, 2010 - UK Backlash over scrapping
of retirement age
UK Backlash over
scrapping of retirement age
UK Ministers faced a backlash from employers yesterday after
announcing that the default retirement age of 65 is to be scrapped
by October next year.
Anti-ageism campaigners, who have complained that forcing people to
retire at 65 is discriminatory, were delighted, but business groups
said the timescale gave companies too little time to prepare.
The CBI said business would be left with many "unresolved
problems", while the Institute of Directors said it "greatly
regretted" the decision. The Con-Lib coalition has so far enjoyed a
honeymoon in relations with business, but the row threatens to put
this under strain.
The change will be felt from April 6 next year because employers
must give six months' notice before forcing someone to retire.
Under the proposals, no new forced retirement notice can be issued
after that date.
Ed Davey, employment relations minister, said: "People are living
longer lives, they are living healthier lives and we think it's out
of date to force them to retire at 65. We want to end this
discrimination." The government will consult on the proposals until
October.
But John Cridland, CBI deputy director-general, said: "Scrapping
the DRA will leave a vacuum and raise a large number of complex
legal and employment questions, which the government has not yet
addressed."
The EEF manufacturers' group warned there could be more employment
tribunal claims from older employees who believe they have been
unfairly forced to leave a job.
The British Chambers of Commerce said: "The government has pledged
to reduce the burden of employment law, but at the same time it is
proposing to restrict businesses' ability to manage their workforce
by phasing out the DRA."
Scrapping compulsory retirement at 65 is likely to boost the 1.4m
people working beyond the state pension age, already the fastest
growing section of the workforce - 12.4 per cent of that age group
are in jobs, up from 8 per cent in just a decade.
"I would not be surprised to see that proportion double within the
next 10 years," said Chris Ball, chief executive of The Age and
Employment Network, which represents employers, professional bodies
and trade unions.
In the short term, he thought the change would encourage more
people to stay on for two or three years rather than provoke a
flood of people working into their 70s. According to Age UK, more
than 100,000 people were forced to retire against their will last
year.
Supporters of the change say it will boost the economy by
increasing the supply of skills and consumers' buying power, and
raise tax receipts to reduce the burden on the state as the
population ages.
Ending the default age will, however, mean a challenge for
employers. In future, their only way of getting rid of a worker
will be to argue that he or she is no longer capable of doing the
job.
The Employers Forum on Age, a think-tank, said these employers had
reaped benefits including being able to fill skills gaps, having a
better connection with customers and improving business
performance.
Mr Ball said that ending default retirement was "only the beginning
of an important cultural change that has got to be embraced by
British industry", which would have to learn "age management".
The reality is there is a massive pensions crisis in the world and
governments can't afford to support people. Sensible pension
planning is of the course the answer.
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