Default Retirement Age Officially Ends
Employers are no longer able to force older workers to retire once they reach 65 years of age following a gradual phasing out of the Default Retirement Age (DRA).
Older workers will now have more choice about when to stop working, with October 5 marking the latest possible date in which workers aged 65 can be forced to retire.
Before April 2012 employers were entitled to give between six and 12 months’ notice if forcing retirement, with a possible six months extension in some cases.
The removal of the DRA comes in response to an ageing nation and the financial crisis, both of which have affected people’s retirement savings and level of income.
Saga has welcomed the move, which it says should have happened many years ago.
Director general of Saga Dr Ros Altmann said: “The fact is that people are simply not ‘old’ or ‘past it’ any more in their sixties and, after all the tremendous advances in healthcare and labour practices, there is no reason why those who want to keep working should be forced out just on the grounds of their age. ”
“Such ageist attitudes and discriminatory practices have no place in a modern labour market.”
She said that keeping more over 65s economically active would benefit medium term job prospects for the economy and leave more in older pockets to spend on leisure and services.
According to data from Saga, there are now a record number of employees working past the age of 65, with around 870,000 in employment in the final quarter of 2010.
As well as the financial benefits to individuals and the public purse, working later in life can also offer greater social and physical benefits to the individual.
The Government has said that businesses also stand to benefit from the abolishment of DRA and the resulting age diverse workforce. It can also reduce recruitment and training costs, increase productivity, and retain the skills of experienced members of staff.
We are happy to discuss your options on working past your state pension age or your options if you’re reaching retirement. Please get in touch to find out more.