The default retirement age review, which was tabled for 2011, has been brought forward to next year. It could bring an end to the default age of 65, at which employers can currently force staff into retirement.
Pensions Minister Angela Eagle says: “It is time to look again at this – we want to give older people flexible retirement options. The different circumstances today suggest that an earlier review is appropriate. As Britain’s demographics change, it is sensible that we have the debate on what works for business and individuals.”
Watson Wyatt head of defined benefit pension consulting John Ball says: “It’s by no means the case that all employers enforce mandatory retirement ages. One in 10 men over 65 are still in work, and this number was rising sharply until the recession stopped even the biggest employment growth areas in their tracks.”
Ball says the Government may even force employers to keep people from retirement as the closure of final salary pension schemes accelerate and the State Pension becomes more strained.
He also warns that more people will have to carry on working beyond retirement age for money rather than for the love of working.
He says: “In the long term this could make employers more willing to provide good quality pensions and more nervous about taking on older workers who have little by way of pension provision from their previous employers.”