Enforcing early retirement: Productive or not?

The default retirement age was abolished in 2011, which now means that employers can no longer let someone go simply because they've reached 65. In principle this sounds like a positive change for everyone involved. However, in practice does this work or is age discrimination simply being dressed up in a different way?

Many employers have embraced the changes, but some are still looking for ways to push employees out once they're 65. There are some exceptions to the law if a company can prove a justifiable business reason why someone should be forced to retire at a specific age. Since the introduction of the law, there have been a number of legal challenges, some of which have ruled in favour of the company and others towards the employee.

Providing Benefits For The Whole Economy

As people reach 65 they are not considered as old as in the past and still have a lot that they can give to their employer and the wider economy. Employers, from family law solicitors in Liverpool to large multi-national corporations, are constantly complaining that potential recruits don't possess the skills required to undertake specific roles. However, there is a whole raft of older workers with extensive business skills and experience who could be a valuable asset. For many years they have been pushed aside in favour of less experienced, but younger workers. If businesses start to retain staff beyond the perceived retirement age, then this could benefit younger people by allowing them to learn from the older generation.

Allowing workers to continue working into their late 60s will boost the overall economy. If employees were forced to retire and live off their private or company pensions they would have less disposable income, reducing their spending power. This could have a detrimental effect on the economy, especially while it's still in such a fragile state. If they remain in employment they will continue to spend, which in the long run will provide more job opportunities for younger workers as companies invest to meet demand.

The Rise in Legal Challenges

The abolition of the default retirement age has not been embraced by everyone and many companies are spending large amounts on legal fees to challenge the rights of workers. If a company wants an employee to retire at a certain age then they have to prove that this is right for the business, either because it provides more opportunities for younger workers or it prevents them being dismissed for poor performance. However, employees often feel that this isn't true and are challenging these rulings in the court, claiming they're being discriminated against due to their age. This situation is not beneficial for anyone involved. It forces businesses to concentrate on other issues rather than investing in the company and planning for the future, potentially reducing employment opportunities.

Whether you want to retire at 65 or continue working, it should now be everyone's right to decide with their employer when is the right time for them. Employers need to start becoming more flexible and maybe offer a phased retirement process, allowing employees to reduce their hours over a period of time and pass on important skills to the next generation.

This post has been contributed by Zoe, a law blogger from the UK who has composed this post on behalf of Hughes Carlisle. Feel free to drop the Hughes Carlisle team a line at the following address:

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