Government plans on retirement cause controversy

Author: Alexis Asher

Government plans to abolish the default retirement age (DRA) in October 2011 have sparked controversy amongst UK business organisations.

The Confederation of British Industry (CBI) has called for the Government to delay its plans to abolish the DRA. The CBI believe that there is not enough legislation in place for employers to understand how to carry out retirement fairly once the changes come into force.

The CBI have commented on the contradiction posed by the plans to abolish the DRA. On the one hand, employers understand that employees want to work for longer periods of time to cover shortfalls in their pension. They also appreciate that older workers bring experience and loyalty that may not be so apparent in younger workers. However, in reality working beyond the age of 65 is not always going to be possible, particularly in jobs involving physical demands not suitable for older workers.

The CBI believe that the Government should halt the current plans, until such time as clearer legislation is put in place.

The Director General of Saga, Ros Altmann has responded to the comments made by the CBI to say that Saga believe the DRA should be abolished “without delay.” She believes that if the Government’s proposals are not carried out as planned it will have a negative impact on the economy as a whole since older individuals will continue to be served with notice of retirement at the age of 65, and have significantly less money as a result.

The debate will no doubt continue, until such time as the transitional arrangements come into play in April 2011.

Related retirement blog entries: New Government: New plans for Retirement

Should you seek advice on retirement, please do not hesitate to contact the Employment Team at SA Law on  01727 798000