The Employment Equality (Age) Regulations 2006 provide for a default retirement age of 65 and Age Concern brought proceedings against the government arguing the retirement age was discriminatory.  

The lengthy litigation, including a referral to the ECJ, ended with the High Court deciding that although the default retirement age of 65 was on the face of it discriminatory, it had been introduced to pursue legitimate social policy objectives and was lawful.

In October 2006, when the Regulations were introduced, the government had already stated its intention to review the default retirement age in 2011 but recently brought this forward to 2010. The review will be conducted by the Department for Business Innovation and Skills (BIS) and the Department for Work and Pensions (DWP). They will consider whether the default retirement age of 65 is still appropriate and necessary.  The government has now commissioned a major research project, the Survey of Employers’ Policies, Practices and Preferences relating to Age. The purpose of the survey is to obtain information about employers’ age-based practices in particular the default retirement age. This information will be considered by the government as part of its review. Evidence is sought in relation to the following areas:

• The operation of the default retirement age in practice
• The reasons that businesses use mandatory retirement ages
• The positive and negative impact on businesses, individuals and the economy of raising or removing the default retirement age
• The experience of businesses operating without a default retirement age
• How could any costs of raising or removing the default retirement age be mitigated and benefits realised

Information is requested by 1 February 2010 to draevidence@bis.gsi.gov.uk

Although many organisations recognise the business benefits of a mixed-age workforce other are anxious at the possible removal of the default retirement age. Of particular concern is the cost of maintaining employee benefits.

For example, it may be more expensive to maintain private health care cover for a 70 year old than a 50 year old. Other practical issues include the need to manage the performance and ill-health issues that may arise if there is no specified retirement age.

Recent research reveals that many people are keen to work beyond the retirement age. In the Consulting Employment Survey 2009 (relating specifically to the manufacturing sector) 47% of employees who had reached 65 in the past 12 months had asked to postpone their retirement. The vast majority of requests, (84%) had been accepted by employers but around two thirds of employers surveyed, (65%), would like to retain the default retirement age of 65. Support for retention is slightly higher among large and medium-sized companies than in small firms. The Employee Outlook Survey 2009, carried out by the CIPD found that 71% of people aged 55 and over plan to work beyond the age of 65, a significant increase on the 40% from two years ago and financial reasons are the main reasons cited. The Employers Forum on Age (EFA) has long campaigned for the removal of the retirement age completely and many organisations have no retirement age including BT, HBOS, Tesco, and the Co-operative Group.

Employment newsletter - Winter 2009