News & Publications - Employment

Phasing out the default retirement age

Currently, an employer can force an employee to retire at the age of 65 without paying any financial compensation. The only obligation on an employer is to hold a meeting with the member of staff to discuss plans at least six months before their 65th birthday. Although the employee can request to work beyond the default retirement age, the employer does not have to agree to the request, or justify any refusal.

The government plans to scrap the default retirement age in the UK from October 2011. It hopes that the change will encourage people to work for longer, against a backgound of an ageing population.

It proposes to begin phasing it out from April 2011. Proposals are subject to a consultation which will run until 21 October 2010.

The key proposals are:

• retirements under the default retirement age of 65 will cease completely on 1 October 2011 and no new notices of intended retirement may be issued by employers after 6 April
• retirement dismissals will still be permitted after 1 October 2011, but only if objectively justified
• transitional arrangements will apply to retirements that have been notified before 6 April 2011 to take effect before 1 October 2011. Retirements notified by 6 April, but intended to take affect after 1 October will not be valid (unless objectively justified)
• the current procedural requirements applicable to a retirement dismissal, set out in Schedule 6 to the Age Regulations will be abolished

Click here for a link to the consultation paper: www.bis.gov.uk/retirement-age

If you have any further queries, please do not hesitate to contact Howard Lewis-Nunn or Tanya Gruneberg in our Employment Team on 020 7544 2424.