Government's proposals on retirement ages - 14th December 2004

The Government has published its plans for dealing with retirement ages under the new law on age discrimination which must be in force by October 2006.

The new proposals do not go as far as it had originally been suggested they might.

Main proposals:

Under the new proposals, a default retirement age of 65 will be set but employees will have the right to request to continue working beyond the compulsory retirement age; a request that employers must seriously consider.

The right to request to be allowed to continue after 65 will follow the model of the right to request flexible working - i.e. the employer has to give a reason for the refusal, but the way this law works means that any refusal cannot really be challenged by the employee on any sensible grounds in a tribunal.

Employers will only be allowed to set an earlier compulsory retirement age of under 65 if it can be objectively justified, i.e. if it is “appropriate and necessary”.

The Government has also committed to closely monitoring the appropriateness of keeping a default retirement age, with a formal review set to take place five years from implementation of the legislation.

The exact form of the legislation will be subject to consultation starting in 2005.

Those employers whose contracts specify an earlier retirement age than 65 will have to consider their position. It would be sensible to wait until the draft legislation is available in 2005 before taking any action.