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19th February 2020
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Forced retirement less good for some

Posted 03/08/2010 by RoseS

The news last week that people will no longer be forced to retire at 65 is good news potentially for employees, especially those still increasingly struggling with debts and mortgages. It is, however, less good news for employers, for whom keeping on staff indefinitely will arguably ‘hamper their abilities to plan for the future,’ according to The Forum for Private Business. The Forum believes the move could also ‘open the door to costly and painful employment tribunals’, brought on as a result of the need to find ways to dismiss elderly staff through evidence of declining competence. In a recent survey, only 4% of its member companies thought removing the default retirement age was justifiable.

The news may also be bad for those who are currently out of work or seeking employment as it will mean that fewer new jobs are created as a result of people finishing work at the normal age of retirement. According to the latest figures from the UK Office for National Statistics, 2.47m people were unemployed in the period from March to May 2010, down 34,000 from the three months to February but up 92,000 from a year earlier. Young people in particular, so we keep hearing, are finding it especially hard to find work, with 707,000 18- to 24-year-olds reported to be without jobs in the three months to May 2010. According to a recent report by Reuters news agency, Cath O’Driscoll one in 10 of last year’s graduates in Britain failed to find work, with 20,000 still looking for a job six months after their finals last summer.

The main economic case for scrapping the age of default retirement, however, is demographics. A report last week in The Times newspaper pointed out that in 1901 only 5% of the population was 65 or over but by 1955 this had more than doubled and today stands at 16%. It added that there are currently four adults under 65 for every adult under 65, but this ratio is projected o be 3:1 in 10 years and 2:1 within 30 years. Meanwhile, a surprising 12% of workers are already employed beyond the retirement age.

The new arrangements will begin to be phased in starting next April, after which firms will no longer be able to send staff retirement notices six months’ before their 65th birthday.

Cath O’Driscoll - Deputy Editor

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