EU backs forced retirement at 65

The EU says there's nothing wrong with the UK's compulsory retirement age. But who'll foot the bill?

by
Last Updated: 31 Aug 2010

The European Court of Justice ruled this morning that the UK set-up, where people can be forced to retire at 65, is not a breach of EU legislation – as long as it had ‘a legitimate aim related to employment and social policy’. Age Concern, the charity that brought the case, arguing that it was illegal to dismiss people purely on age grounds, now has to rely on the UK High Court ruling against it. At a time when people actually want to keep working beyond 65 for financial reasons, and rising life expectancy is increasing the cost of supporting pensioners, surely something has to give?

At the moment, UK employers are allowed to summarily dismiss a member of staff on their 65th birthday, without being liable for redundancy payments or discrimination charges. Age Concern believes this is not only unfair but also a waste of talent – and given the falling value of pension pots lately, many employees actually want to work beyond 65. They can still request an extension, of course – but with things as they are, it’s easy to see why hard-pressed employers might refuse (particularly since these people could well be among the highest earners). The Government is due to review the law in 2011, but activists believe it needs to happen sooner.

Catherine Pusey, director of the Employers Forum on Age, said she was ‘disappointed, though not surprised’ at the EU’s verdict, which she says proves that ‘both the ECJ and Government regulations are completely behind the times... In an ageing society and as recession begins to bite, we can no longer afford a culture of early retirement.’ Age Concern agrees: ‘The government continues to consign tens of thousands of willing and able older workers to the scrapheap,’ it told the BBC today (including one in eight MPs, theoretically).

Clearly the Government’s going to come under increasing pressure on this issue – not only as the High Court decides whether its aims are legitimate, but also in Parliament, with both the Tories and the Lib Dems opposed to the current law. Legally, it’s hard to see how it can justify its exemption for compulsory retirement, given the existing age discrimination rules. How can age be irrelevant to every employment decision - except for 65-year-olds? Surely you can't have it both ways. And financially, it’s even harder to see how the numbers stack up. Can we really afford to be pulling (often highly-skilled) staff out of the workforce when we probably need to be all hands to the pump – particularly when the increasingly skint state then has to fund their retirement for another 10 or 20 years?

Much though we fancy the idea of sitting around doing crosswords, taking up crown green bowls and doing a few days at the local Oxfam at the earliest possible opportunity, it’s hard to see any way in which the current set-up is sustainable...


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