Trawling the papers the other day, I saw an interesting snippet with regard to the UK Government’s proposal to scrap the standard retirement age of 65. An attempt to debunk the myth that we are “past it” once we hit 65.
The plan is not to force Britons to work beyond 65, but to give them the option to choose to. In truth, that option already exists to an extent. Before 2006, the compulsory retirement age was set at 65 at the latest, and earlier for some jobs. But the Government changed the law so 65 is now regarded as a ‘default’ retirement age and workers can request to stay on. However, companies are currently not compelled to agree to their requests to work on and the Government want to give people the legal right to do so.
The move is understandable. Not only are there a lot of over-60s with vast experience which is being lost from the economy each year but also, by allowing people to work longer, this will help reduce the pressure that final salary pension schemes are under – retiring at 65 today means that you might reasonably expect to go on for another 20 – 30 years and final salary pensions were never designed for that. Life expectancy for men in 1951 was only 66!
Nevertheless, these plans will undoubtedly alarm employers. Business leaders have insisted that companies need some sort of ‘cut-off point’ when older workers must retire.
There are concerns that firms would be faced with ‘bed-blocking’ older workers refusing to go. While employers will still be able to decline the requests, they would have to give one of eight valid reasons for doing so.
Watch this space….!