The government yesterday announced its plans to remove the default retirement age (DRA) this year, despite calls from employers to delay the measures, according to reports.
The decision will provide more choices to people in work about when they wish to retire. At present it is possible for employers to make staff retire when they reach the age of 65.
The Default Retirement Age will be phased out over a period between 6th April 2011 and 1st October 2011. It will ne necessary for employers to give staff a notice period of at least six months when using the Default Retirement Age to force retirement.
The main reason for the change is due to people living longer and healthier lives. Forcing people to retire at age 65 is often causing financial difficulties where people are relying on the ability to keep working in older age to supplement other sources of retirement income, such as the State Pension.
Ed Davey, minister for employment relations, consumer and postal affairs, said the government would help businesses deal with the change.
‘Older workers have a lot to offer in the workplace and it's time we got rid of this outdated form of age discrimination. We will do all we can to support businesses with the change,’ he said.
People should not necessarly rely on the removal of the default retirment age as a retirement strategy as individulas may not be able to work beyond age 65 due to for example ill health.
It is important to adopt a flexible retirement strategy and create a personal Financial Plan and this move gives more flexibility to individuals in doing so.
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