UK plans to scrap forced retirement age in 2011

 Currently, employers can force staff to retire at the age of 65 regardless of their circumstances and without having to pay any financial compensation.

Under the government’s proposals, the default retirement age would begin to be phased out from April 2011 and come to an end by October next year.

Ministers said the move was designed to give people more choice as they enjoyed longer and healthier lives.

With Britain needing to cut public spending and raise revenue to address a record budget deficit, the move also would see people paying tax for longer.

In January, Britain’s Equality and Human Rights Commission argued that abolishing the retirement age would inject £15 billion into the economy.

The proposals will also include a review of when the state pension age should be increased to 66, and to re-establish the link between earnings and the basic state pension.

“With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age,” Employment Relations Minister Edward Davey said.

Vital contribution

“Older workers bring with them a wealth of talent and experience as employees and entrepreneurs,” he said. “They have a vital contribution to make to our economic recovery and long-term prosperity.”

The Employers Forum on Age, an advocacy group, described the move as “an incredible leap forward”. However, the Confederation of British Industry, the main business lobby, said the compulsory retirement age allowed employers to plan for the future and added the speed of the proposed change left business with little time to prepare.