The government will announce today that it is to scrap the default retirement age of 65 this year, against the wishes of businesses, who fear it will cause legal confusion and lead to a rise in cases taken to employment tribunals.
The move will come into effect in April. The retirement age of 65 was first introduced only in 2006, with the intention of protecting people from being forced to retire early. In practice, the regulation has seen many workers who wanted to work into their late 60s and even early 70s being forced to retire against their wishes.
The CBI had been outspoken in its opposition to the changes. John Cridland, the CBI's director general designate, called the default retirement age the "number one employment regulatory issue" for this year, and described the Government's proposals as "not fit for purpose". He had pleaded with the Government to delay the move for a year, giving businesses more time to prepare.
From 6 April employers will no longer be able to give six months' notice of forced retirement. The default age will be scrapped completely from October. While the move is likely to strain relationships between business and the Government, other measures to placate businesses are expected to follow, including the introduction of a fee to lodge claims in an employment tribunal, and doubling the qualifying period for unfair dismissal cases to two years.
Scrapping the default retirement age was a manifesto pledge by both Coalition parties. Supporters of the scheme say it will benefit hundreds of thousands of people at risk of being forced into retirement, and is in keeping with the fact that people are living longer and healthier lives.