Retirement under review

A review of the default retirement age (DRA) is to be brought forward to next year, as part of a government strategy to prepare for an ageing society.
The DRA review, originally scheduled for 2011, will look at ways to give people flexible retirement options. Currently, employers can require all staff to retire at 65 regardless of their circumstances. While the majority of people retire before 65, 1.3 million people choose to work beyond state pension age. However, Faith Dickson, partner at niche pension firm, Sacker & Partners, says: “It’s not impossible that removing the default retirement age entirely could discriminate against younger people trying to enter a difficult job market. Having a default retirement age also gives employers some certainty about managing their workforce. While you can’t disagree with the basic sentiment that people shouldn’t be written off as being too old to work, surely we must also give some importance to employers having certainty in managing their workforce, and allowing young people entry into the job market?

“Since pension schemes currently enjoy a number of exceptions from the general principles of the anti-age discrimination legislation, those of us in the pensions world can only hope that this doesn’t become the first in a long line of reviews of the exceptions that apply under the legislation.”