Harriet Harman announces review of retirement age
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Minister for women and equality Harriet Harman set out new proposals today to scrap compulsory retirement at age 65.
Speaking at the Age UK conference in London, Harman announced a fast track review of the retirement age.
She said people should be allowed to continue working into their 70s or 80s if they choose to do so.
The proposals will not affect the point at which the state pension can be claimed.
Harman said the increase in the number of well, older people demands a change in public policy.
She said: “We still have more to do to tackle the attitude that once you reach 60 you are just treading water until you become frail and dependent.
“This is important not just for those individuals concerned but for the economy as a whole. We have to banish the ageism in the workplace that costs the economy up to £31bn per year due to lost GDP.”
Pension consultant Ros Altmann says by having a state pension system that relies on mass means-testing, the least well-off people who try to work part-time after age 65 will be penalised.
She says: “Pension credit penalises any earnings over £5 a week, so if you try to work part-time to supplement your income, you will lose between 40 and 100 per cent of your earnings.
“Which, of course, means that policy discourages low or moderate earners from staying at work at all. This policy must be urgently reviewed, since it would be far better for older people who want to work part-time, to be encouraged to do so, rather than penalised for it.”
Standard Life head of pensions policy John Lawson says: “Baby boomers’ attitudes to retirement have fundamentally changed and they are now more ambitious for this ‘third stage’ of their life than any generation before them.
“For this generation, rather than seeing retirement as a way of stopping work, two fifths want to continue to be involved at work but on their own terms. The fast-track review is very welcome news for the millions of people facing retirement, not because they want too, but because current legislation effectively forces them too.”
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Readers' comments (20)
Ian Mason | 11 Jan 2010 2:01 pm
What about scrapping 75 as the compulsory annuity age. If we are to move retirement ages up this is a must or we will have another financial disaster
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Anonymous | 11 Jan 2010 2:02 pm
Great news for workaholics but I know quite a lot of people, including myself, who are rather looking forward to some rest before their bodies are just too exhausted, to start enjoying themselves properly and putting personal life before work.
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Mike Davies | 11 Jan 2010 2:10 pm
I'm 67 and still working, including commuting 4 days a week into the City, with no intention of giving up yet - simply because one of my NED roles needed me full time. The present system whereby you have the right to request to work on,but the employer has the right to refuse that request, is completely pointless.
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Peter Sercombe | 11 Jan 2010 2:12 pm
I'm one of the baby boom born 1946. The goverment has never ever consider 2012 when many of my generation would reach 65.
The work force would be considerably reduced, meaning that the goverment funding for retirement would be depleted worse than it is now.
Good idea to continue to work, but I feel that this consideration has been fare to long in the making.
I beleive that Harriot Harmen only doing this to reduce the pension payments and bring in more revenue, please remember to continue to work means receiving tax's that would not have been paid.
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Stephen Phillips | 11 Jan 2010 2:14 pm
How can people be "allowed to continue working into their 70s or 80s if they choose to do so" when this government steadfastly refuses to raise the age at which annuitisation (or ASP) must start beyond age 75?
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John S | 11 Jan 2010 2:17 pm
This MUST include recognition that the 75 age restriction should go. With longevity it may become prudent (or indeed the only option for some) to continue to save up to 75 and beyond.
Move all MP's onto DC now, then they may take the issue seriously!
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Anonymous | 11 Jan 2010 2:28 pm
Why have any restriction? If you want to and are able to then work on. Why just move the goalposts to cover the baby boomers. If you save and want to pursue other non work related activities legislation should not get in the way.
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Anonymous | 11 Jan 2010 2:29 pm
As I have got older, I find myself being more critical - of the government, the industry, the weather, the local council and its lack of gritters (or grit to be more precise), my neighbours....the list goes on.I was never like this even 10 years ago. I personally enjoy change - but many of my friends and colleagues of similar ages find change more difficult. If we are to have a society of working people in their 70's and 80's - we will all need to embrace change, stop complaining about how it used to be, and recognise that with age comes experience and provided that experience is channelled positively - we could once again become a great country.....with some true grit!
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Bob Perry | 11 Jan 2010 2:40 pm
i wholeheartedly agree that the age 75 deadline on annuity/ASP MUST go.
Means testing must also go. People should not be penalised for saving or working.
Whilst it will be good to allow people to work beyond age 65 , employers must be given the ability to ask workers to leave (without accusations of ageism etc) if absenteeism becomes a problem with age or if the worker can no longer fulfil his or her duties effectively.
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Anonymous | 11 Jan 2010 2:42 pm
I wish that Hariet Harman would scrap herself.
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