End of the line for the default retirement age

End of the line for the default retirement age

The Default Retirement Age (DRA) is to be phased out this year so that people have more choice when to stop working.

Ministers have decided to proceed with their plan to phase out the DRA between 6 April and 1 October 2011.

Currently the DRA enables employers to make staff retire at 65 regardless of their circumstances, but the Government feels the rules must change as people are living longer, healthier lives.

Employment Relations Minister Edward Davey said: “Retirement should be a matter of choice rather than compulsion – people deserve the freedom to work for as long as they want and are able to do so.

“Older workers can play an incredibly important role in the workplace and it is high time we ended this outdated form of age discrimination.

“We are putting in place support to help business adapt to the change, but it is important to remember that about two-thirds of employers already operate without fixed retirement ages - and many of those with retirement ages already offer flexibility for workers to work longer.

Minister of State for Pensions Steve Webb said: “It’s right that we put an end to this outdated form of discrimination where employers can force people out of a job simply because of their age. We will work with employers to ensure that the transition is fair and well understood.”

The change means that from 6 April 2011, employers will not be able to issue any notifications for compulsory retirement using the DRA procedure. Between 6 April and 1 October, only people who were notified before 6 April, and whose retirement date is before 1 October can be compulsorily retired using the DRA. After 1 October, employers will not be able to use the DRA to compulsorily retire employees.

Although the Government is removing the DRA, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it.

The deregulatory measure is one of the steps the Government is taking to help encourage people to work for longer against the backdrop of demographic change. Others include raising the state pension age to 66 faster than currently scheduled and re-establishing the link between earnings and the basic state pension.