The scrapping of the default retirement age (DRA), first proposed by the coalition government last July, will be phased in from April and will mean from October no person can be compulsorily retired just because they have turned 65.
The change, which will be unveiled by business minister Ed Davey in a ministerial statement today, will not require further legislation, dismaying employers groups such as the CBI and the EEF which have said they need more time to prepare for the change, which they fear could lead to legal uncertainty and a wave of employment tribunals from disgruntled employees.
CBI director general John Cridland said the DRA was the “number one employment regulatory issue for this year”, and is concerned its abolition will result in “demeaning” performance reviews to manage out older employees where their output has deteriorated due to age.
Davey’s statement will coincide with the publication of the Pensions Bill outlining plans to raise the state pension age to 66 for everyone by 2020. The women’s pension age is already rising from 60 but after 2018, the male pension age will also begin to rise.
Work and Pensions secretary Iain Duncan Smith will also today publish plans to force all bosses to pay into a pension for their workers for the first time.