Retirement Age Scrapped

The government announced last week that from 1 October this year the default retirement age will be scrapped.

This means that employees who reach 65 years of age and are still capable of doing their job must be allowed to continue working. Nobody aged over 65 will be forced out of the workplace on the grounds of age alone, but will have to be dismissed for the same reasons as people under 65.

The government says that employees will benefit from choosing when and why they retire, while also benefiting the economy by paying tax and national insurance for longer.

However employers will be able to reduce expenditure by excluding staff aged 65 or over from company benefits, such as life and medical insurance, if the premiums become too expensive.

The move has been welcomed by employers who consider that scrapping the DRA will give them access to wider recruitment pools and help them retain the corporate memory. Research has also shown that mixed-age work teams bring increased customer satisfaction.

However employers who still expect staff to retire automatically at 65 may find themselves facing employment tribunal claims.

Martyn Brown, principal solicitor at Integrum Law commented “Any employers wanting to shed staff aged over 65 can no longer rely on their age, instead it is now up to employers to make a proper business case for retirement”.