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Employers concerned at effects of age legislation

Half of employers believe that anti-age discrimination legislation makes employee benefits such as life cover, income protection and private medical insurance less sustainable in the future.

Consultancy Watson Wyatt recently surveyed 130 UK companies and found that 50 per cent believe the Employment Equality (Age) Regulations Act 2006 is threatening the future of protection insurance in the UK.

The legislation, which was introduced in October last year, means that employers cannot enforce mandatory retirement ages.

Healthcare and risk consultant Rick Wilkinson believes that the survey results show that employers are concerned about the possibility of increased insurance costs and the risk of litigation.

He says: “The anti-age discrimination legislation forced many employers to reconsider the design of their risk benefit programmes and, where significant amendments have been made, we have seen premium increases imposed by the incumbent insurer.”

The survey also found that pressure on employers has intensified since the FSA abolished the age 70 rule in June this year.

Wilkinson says some companies have used the lack of availability of insurance beyond age 70 as justification for enforcing a mandatory retirement age.

He says: “The challenge for insurance companies is either to price more commercially or to offer flexible solutions, although I hope that these would not be mutually exclusive options, otherwise, there is a real danger that employers will withdraw some benefits altogether or at least significantly reduce their value.”


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