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British Government Plans to Scrap Fixed Retirement Age

8 years ago72 views

On Friday Britain announced that it would axe the fixed retirement age next year, saying it wanted to give people the chance to work beyond 65. But business leaders warned the move would create serious problems.

Some ministers say it would give people more choice as they enjoyed longer and healthier lives.

[Edward Davey, Employment Relations Minister]:
"So what we're saying is the default retirement age, when people can be forced to retire by employers, that should go and I think that would be good for individuals wanting to work a little longer, save a little bit more for their retirement, and good for the economy."

Currently, employers can force staff to retire at the age of 65 regardless of their circumstances and without having to pay any financial compensation.

However, with Britain needing to cut public spending to address a record budget deficit, the move would see people paying tax for longer.

And some say employers would face difficulties.

[Katja Hall, Director of Employment Policy, Confederation of British Industry]:
"Our fear is that they will keep on going, perhaps they haven't quite saved enough for their pension, so they feel they have no choice but to keep on going and the employer is left in a very difficult situation where they either have to start performance managing that individual, which is not a pleasant process or just keep them on when they're not really performing in their job."

Under the government's consultation proposals, the default retirement age (DRA) would begin to be phased out from April 2011 and come to an end by October next year.

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