Over the last few weeks we asked recipients of our HR e-briefings how they have responded to, and been affected by, the phasing out of the default retirement age. Thank you to all of those who took the time to respond to our survey. In total 307 employers took part in the research and the information supplied has provided invaluable insights.

Summary

Of those who took part in our survey:

  • Very few say their organisation now has a policy of mandatory retirement for its employees: less than 3 per-cent (compared with 69 per-cent of those who took in a similar survey two years ago). Most (72 per-cent) indicate their organisation abandoned its mandatory retirement policies because of the Government's decision to repeal the DRA.
  • More than half (56 per-cent) say the repeal of the DRA has led to an increase in the number of employees staying on beyond age 65 or normal pension age. However, only a small number (6 per-cent) report seeing an increase in recruitment of employees aged over 65.
  • Many report that the change in the law has had negative effects for their organisation:
    • difficulties in succession planning (reported by nearly two-thirds of those who took part in the survey);
    • opportunities being blocked for younger workers (reported by just under half);
    • increased costs of redundancies and/or providing benefits (reported by 37 per-cent);
    • more management time having to be spent on performance management (reported by 29 per-cent);
    • an increase in ill-health absence (reported by just over a fifth).
  • A significant number report that the abolition of the DRA has had positive effects, including:
    • improvements in retaining important skills and knowledge (reported by a third of those who took part in the survey);
    • savings on recruitment and training costs (reported by 17 per-cent); and
    • savings in time spent dealing with retirement procedures (reported by 22 per-cent).
  • Very few report any change in the number of age discrimination claims as a result of the DRA being abolished: only 4 per-cent report an increase in age discrimination claims, and 6 per-cent say the number of age claims has actually decreased.
  • Looking at the net effects over-all, a third (34 per-cent) feel the abolition of the DRA has had a negative or very negative impact on their organisation. Only around one in seven (14 per-cent) feel that the change has been positive or very positive, while half feel that the abolition of the DRA has made no real difference to their organisation.
  • Just under half (48 per-cent) think the DRA should be reinstated, while 43 per-cent believe the law should be left as it is.

Click here to read our full report