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Harriet Harman announces review of retirement age

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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Comments

There are 21 comments at the moment, we would love to hear your opinion too.

  1. 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

  2. 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.

  3. 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.

  4. 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.

  5. Stephen Phillips 11th January 2010 at 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?

  6. 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!

  7. 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.

  8. 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!

  9. 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.

  10. I wish that Hariet Harman would scrap herself.

  11. Enforced annuitisation, at any age, must go to allow sensible financial planning in later years – this hangs over all planning from about age 50 on and militates against long term strategies.

  12. I hope this is not History repeating itself. Was it not Harman who came out with the radical health care for the elderly proposals before the Election that swept Blair into office, only to find them immediately thrown out and herself passed by for Cabinet?

    More importantly instead of helping those who need to work beyond 65 how about making those that do not need to, all the millions of public sector workers, at least work until 65, that alone would save the country billions.

  13. This is a very one sided view of retirement as visualised by 30 – 45 year olds who see only work as something which can make life meaningful. The review of the retirement age is more to do with the Government knowing that people will not be able to afford to retire following the demise of final salary schemes which means that people will have no choice other than to keep working.
    Many people in the third stage will agree with Standard Life’s John Lawson in that they are ambitious for that stage of their life but I would argue that if they could afford it, the ambition would be to enjoy new experiences and an interesting leisure time rather than to work more.

  14. To Anon. 11/1/10 2.42.

    I believe Harriet is facing an uphill task even to get re-elected as an MP, her majority at last election was not great, so you may get your wish.

  15. Yes 100% agree with all the comments about annuity age, can’t believe Harman is talking about extending working without scrapping annuity age………. no wait, I can!

  16. John A. Douglass 12th January 2010 at 9:23 am

    Great! I hope that it applies to civil servants too (compulsary)

  17. Richard Brown, Managing Director, Moneynotion Limi 12th January 2010 at 1:12 pm

    No retirement age, yet banks, insurers et al have been shedding staff when they get to much lower ages than 65.

    And what about the public servants, who can retire at 60 on inflation proofed final salary pensions? Are they going to work on? Are they hell!

  18. Group Income Protection would become unaffordable to cover all staff to 70 or 75. This would restrict the payment of GIP to a set period of time which penailises the younger staff whole fall ill at an early age.

  19. Scrap compulsory retirement at age 65 but keep forced RDR redundancy 2012! Sound like double speak to me.

  20. Be scared you 50+ year olds, be very scared ! If your employer cannot rely on seeing the back of you @ 60 or 65 it is more than likely that they will be much more ruthless in applying “Performance Management” ( the jargon phrase for edging people out who’s performance is not as hot as younger employees or who’s faces simply do not fit with their new younger superiors who just want to build their teams in their own image.
    Imagine the pleas to HR from a middle manager “Be stuck with this old f@rt / old trout ’til he / she is gone 70, ? No fear, get shot ASAP please “

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