David Cameron’s administration is expected to ditch the default retirement age as early as October next year. At present, when an individual reaches retirement age they can be asked by their employer to retire even if they would prefer to keep working.
The Department of Business, Innovation and Skills (BIS) have put forward a new proposal, which centres around a healthier lifestyle and the fact that as a nation we are now living longer. The idea is to give individuals the power to decide when they retire. This has been backed up by Edward Davey, employment relations minister, who claims it has been borne out of many individuals’ desire to continue working past the traditional retirement age. He said that such individuals should not be discriminated against.
The proposal has also been welcomed by a number of parties with a vested interested, including UK unions, employers groups and employers. Andrew Groves from Yell pointed to the opportunity to deal with skills shortages in the UK by permitting skilled workers to work for longer. Employers, however, regularly favour younger workers who have the energy and stamina required for a fast-paced working week but the skills of the more mature worker should not be overlooked. Critics have suggested that this could have a knock-on effect on the job prospects for the younger generation but the REC believe that as long as the government deals with job creation in a pro-active manner this needn’t be an issue.
While the TUC have also welcomed the plans proposed by BIS, they have also suggested that the coalition government consider allowing individuals to phase their retirement which would allow individuals to adapt to part time work before stopping work altogether.