Default Retirement Age

At present, the Employment Equality (Age) regs set a default retirement age of 65, but give employees the right to ask to work beyond their 65th birthday (but which the employer does not have to agree to).

  

The Coalition government has now announced that it will be phasing out the Default Retirement Age from April 2011. Does this mean that employees can continue working forever? Not quite. It is currently planned that:

• After the 1st October 2011, employers will not be able to retire staff on a compulsory basis.
• Retirement dismissals will still be permissible after 1 October 2011, but only if ‘objectively justified’, though quite what an objective justification for retirement may be remains to be seen.
• Between the 6th April and the 1st October 2011, only people who were notified of their retirement before the 6th April 2011, to retire before the 1st October 2011 can be compulsorily retired.

In their press announcement the government explains this as people are living ‘longer, healthier lives’, and not (as cynics may suspect) because of the looming pensions crisis. Consultation is ongoing, and news of how this will be implemented will follow in due course, but this is likely to entail a major change in how employers and employees alike think about retirement.

James Carmody
www.reculversolicitors.co.uk