Connected Research

Union policy research in the 21st century

Review of default retirement age brought forward

with 2 comments

The government has announced in a cross-departmental consultation document, Building a Society for all Ages, that it is to bring forward to next year a review of the default retirement age, scheduled originally for 2011.

Currently, in spite of age discrimination legislation, employers may still compulsorily retire individuals at the default age of 65. This was the subject of a recent case in the European Court of Justice (Heyday) brought by Age Concern, with a largely unfavourable decision (in spite of Age Concern’s spin!) prior to the case being returned to the UK judicial system for further hearing in the light of the ECJ’s approach. The case was scheduled for hearing on 16 July.

The review essentially signals an end to the default retirement age, with the Prime Minister explaining its rationale in his Foreword as follows: ‘Evidence suggests that allowing older people to continue working, unfettered by negative views about ageing, could be a big factor in the success of Britain’s businesses and our future economic growth.’

The announcement is coincident with another case being brought against the age, by compulsorily retired solicitor Leslie Seldon, and a number of others are in the pipeline. Age Concern welcomed the move as a step in the right direction but called on the government immediately to put a stop to the ‘arbitrary and unfair rule which stops people from working simply because of their age.’

The decision is welcome, in the sense that people should not be compulsorily retired when they are still able to contribute: but with the important caveats that, with the deterioration in occupational pension provision, people should not be forced to work much later than they otherwise would have chosen for themselves on the grounds that they can’t afford to retire; and that people at the end of their working lives need to be treated with dignity.

In the former case, the decline in pension pots ought not to be used an excuse to raise still further the average age of retirement; in the latter, sometimes quite uncomfortable decisions may now need to be taken about people who are in need of retirement which otherwise might not need to have been made where a default retirement age could still be relied upon. No doubt this may have hidden weak management but, at the same time, people who do need to be retired may find themselves more exposed to that as a result of any removal of the default age. Weak management and treating people with dignity tend not to go hand-in-hand.

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Written by Calvin

13/07/2009 at 5:48 pm

2 Responses

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  1. Age discrimination is undoubtabley a bad thing, however, when it comes to retiring at 65 I can see the point.
    By the time we reach 65 there are, at least, two generations coming up behind us. If people do not retire, where will the jobs come from for them?
    It is hard to understand that a solicitor would have to keep working for financial reasons, so is it just greed? I am sure that a job freed up somewhere down the chain by a retirement would be greatly appreciated by someone who needs to earn to feed, cloth and and house a family (as well as contributing to retirement). If someone is just working past 65 to live an indulgent life of luxury for their retirement, perhaps they should look at the bigger picture. I have never met anyone over 60 who has regretted retiring, we only live once after all.

    Dave simpson

    14/07/2009 at 11:16 am

  2. I think the solicitor in this case said that he needed to carry on working as he’d lost money in the property crash of the 1990s and therefore had nothing for him and his wife to live on after he had been compelled to retire.

    Perhaps a good example of why choosing to invest in property instead of in a pension is not a good idea!

    Interestingly, however, given your comment, the Employment Appeal Tribunal which dismissed his case agreed that the grounds for his dismissal – that partners in the practice were forced to retire so as to give younger solicitors a realistic chance of partnership – were supportable in law. Pensions and increasing longevity in retirement appear to be the principles behind which he is continuing to fight the case but, as you say, that cuts two ways when opportunities are denied to others.

    The announcement of the bringing forward of the review clearly indicate how the government sees the future. The Court of Appeal – which started hearing this case yesterday – ought to decide on the basis of the legislation that already exists, although senior courts are notorious for developing new law to match the policy circumstances of the day. But there is a clear debate here about social policy and the very high levels of unemployment amongst young people are a clear part of that.

    Calvin

    14/07/2009 at 11:51 am


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