6th August 2010: Complulsory retirement age to be retired

The Government is proposing to scrap the default retirement age of 65 by October 2011. This plan has been set out in a new consultation paper.

At the moment employers can force employees to retire one they reach the age of 65 whatever their circumstances and without paying any compensation. The only legal requirement is that employers hold a meeting with members of staff at least six months before their 65th Birthdays. At the conclusion of the meeting it is a matter for the employer to decide whether the employee can continue in their job after they reach the default retirement age.

Under the new rules dismissing someone from work on the grounds of their age won't be possible.

The Government said that the move as aimed at encouraging people to carry on working against the backdrop of demographic changes that have seen the UK population living longer and healthier lives.

Other measures put forward by the Government include reviewing when the state pension age should increase to 66 and re-establishing the link between earnings and the basic state pension.

If the proposals are implemented, then as from 6 April 2011 employers will not be able to issue any notifications for compulsory retirement using the default retirement age (DRA) procedure.

So, how will this effect your future wealth management and pension?

Please contact David Eddleston, Financial Planning Manager on 0161 475 1533 or email David Eddleston.

David is also presenting at the Handforth Hallmark Hotel on the Tuesday 5th October. This is free of charge. Please book online if you would like to attend or contact Eve Haffenden.