In its paper Building a Society for Ages, the Government has announced that it will bring forward its review of the default retirement age, in response to the changing demographic and economic conditions of today. The review was initially promised in 2011. The paper can be found here.
Under the current age discrimination legislation employers are permitted to retire their employees when they reach the age of 65 and provided they follow a prescribed procedure, the retirement will not amount to unlawful age discrimination or unfair dismissal. Upon review, this default age may be raised or abolished altogether.
The Government points to the financial benefits to employees of working longer in that they continue to earn for a longer period and receive an increased pension on retirement. However the CBI is less enthusiastic about the early review, stating that the announcement is disappointing at a time “when so many businesses are under pressure”. It views the default retirement age as necessary to allow organisations to plan ahead