End in sight for compulsory retirement
Wellden Turnbull accountants are advising business owners that the government has started consulting on plans to scrap the default retirement age of 65 by October 2011.
Robin John from Wellden Turnbull said “Under the proposed new rules, it will no longer be possible to dismiss someone from work on the grounds of their age. Currently, employees can be forced to leave when they reach 65, whether they want to or not.
“The government has claimed that, with people living longer and healthier lives, they should not have to retire at a set age if they are willing and able to continue work”.
Other proposed changes include the restoration of the link between earnings and the basic state pension and possibly bringing forward the proposed increase in the state pension age to 66.
Some employers may continue to operate a compulsory retirement age, provided they can provide a genuine justification. For all others, if the changes are brought in as planned, employers will not be able to use the default retirement age after 1 October 2011.
Between 6 April and 1 October 2011, individuals may only be compulsorily retired if their retirement age falls before 1 October and they were notified before 6 April.
While some campaigners for the elderly have welcomed the proposals, business groups have expressed concern that it could give rise to legal problems if an employer and employee disagree over the employee’s ability to continue to do the job.
The consultation will run until 12 October 2010, and can be viewed at www.bis.gov.uk/retirement-age.
For further enquires please call Katie Smith on Tel: 01932 584787 or email k.smith@wtca.co.uk