Government plans to scrap default retirement age from 2011
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The Government is planning to scrap the default retirement age in the UK from October 2011.
The rule change would mean employers would no longer be able to dismiss staff who have reached the age of 65.
Employers are currently able to force an employee to retire at the age of 65 without paying compensation. The only obligation an employer has is to hold a meeting with a member of staff to discuss plans at least six months before their 65th birthday, with the decision to terminate employment solely at the employers’ discretion.
The Government is expected to release a consultation paper today over scrapping the rule. The fact that an employer must give six months notice before forcing someone to retire on the grounds of age means the rule could come into effect as early as April 6, 2010.
Proposals to change the retirement law formed part of the government’s Coalition agreement, and was included in both parties’ manifestos, but previously no deadline had been set.
The Government hopes that people working longer could ease the strain on public finances with more people paying tax, while claiming a state pension.
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Readers' comments (1)
Anonymous | 29 Jul 2010 10:11 am
In reality, not having a default retirement age means that many employees who currently have low paid jobs will continue to work to earn the money - HOWEVER - on the other side there will be less jobs available for school leavers - no vacancy from a retiree where there was before. I can only foresee that this will lead to higher unemployment, therefore increasing the strain on public finances not reducing it!
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