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European Court rules compulsory retirement at 65 is lawful

The European Court of Justice has today ruled that the UK’s compulsory retirement age of 65 is not in breach of EU law.

Watson Wyatt has argued that the judgment is not yet a decisive victory for the Government.

Senior consultant Kathryn Armistead says: “The UK courts still need to decide whether a default retirement age of 65 is an appropriate way of achieving a legitimate social policy aim.

“The ECJ has given a clear steer that, in principle, it can be. However, it has told the UK courts to look for a high standard of proof.”

She says the final outcome could be significant if it affects job cuts during the recession.

Armistead adds: “Many employers need to reduce their headcount one way or another.

“Outlawing mandatory retirement ages would therefore result in more redundancies among younger workers and make it harder for those who do lose their jobs to find new ones.”

Prudential says the Government needs to allow more flexibility over retirement age.

Prudential annuities business director Karin Brown says: “The current economic situation is making it increasingly difficult for many people to retire when they would like.

“Many believe that the money they had put aside over their working lives will not be enough to support them in retirement and so feel the need to keep working and put off retirement until they feel financially secure once again.”

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