View more on these topics

Means test wrecks plan to axe compulsory retirement

Minister for women and equality Harriet Harman has set out new proposals to scrap compulsory retirement.

Speaking at the Age UK conference in London on Monday, 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 but added that the proposals will not affect the point at which the state pension can be claimed.

Harman said: “This is important not just for those individuals concerned but also for the economy as a whole. We have to banish ageism in the workplace that costs the economy up to £31bn per year due to lost GDP.”

Pension consultant Ros Altmann says having a state pension system that relies on mass means-testing means the least well-off people who try to work part-time after 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.

“This 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.”

Syndaxi Chartered Financial Planning managing director Robert Reid says if compulsory retirement is scrapped it may have an impact on the benefits that employers offer workers. He says: “If employers do not give older people the same benefits as younger workers, because they might not be able to get the same cover from life insurers, for example, they could be face discrimination action. Will that lead employers to stop offering benefits to everyone?


Damage limitation

John Lawson say advisers must fight against pre-Budget changes to pensions


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm