Retirement age change should be delayed say business leaders

Posted on December 14th, 2010 | Categories - Pensions

The traditional retirement age of 65 should not be changed until the legal issues relating to the planned move are explained further.

Businesses are asking the government to stall the plans to change the retirement age.

A business lobbying group has urged the government to delay the changes planned for the increase in the national retirement age until more guidance becomes available.

The CBI has warned that the plans need to be clarified before the default retirement age (DFA) of 65 is abolished in April 2011. The organisation argued that that the number of unfair dismissal claims could rise if the legal issues surrounding the plans are not explained to businesses in a simpler and more coherent fashion.

John Cridland, the CBI’s director-general designate said that people have to work longer due to the rise in life expectancy rates and the public sector pensions shortfall. He said “employers understand this, and businesses value the skills, experience and loyalty that older workers bring”.

“However, in certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone. The DRA has helped staff think about when it is right to retire, and has also enabled employers to plan more confidently for the future”.

He added: “In the majority of cases [the DRA change] will not be an issue, but in a minority it will be a serious problem for all concerned. The government needs to act fast, and there should be no changes to the retirement framework until these issues are resolved”.

A Department for Business spokesman said: “We are committed to helping and supporting employers adapt to the change in regulations and will be providing them with guidance, but we should not stop people from working just because they have reached a particular age”.

The spokesman added that the department has researched into the type of support that businesses will require to adjust to the changes. A response, which is supported by 500 of the respondents involved, will be published shortly.