Shake-up of retirement system sees DRA scrapped

| October 5, 2011

A shake-up of the retirement system means the default retirement age (DRA) was scrapped on 1st October.

This now means employers no longer have the legal right to terminate the employment of a 65-year-old.

The new measures come after the Government said people are living longer and are healthier, removing the need for a DRA.

However, there are a few exceptions such as police officers and air traffic controllers.
Charity, Age UK, welcomed the new measures and said older workers have “for too long have been consigned to the scrapheap for no reason other than prejudice”.

A survey last year, conducted by Age UK, found that two-thirds of people supported plans to scrap the default retirement age.

Saga added that the new changes mean older people will have more money to spend, which in turn will boost the economy and “create jobs for more people.”

However, not everyone welcomed the changes and John Walker, national chairman of the Federation of Small Businesses (FSB) said it was disappointed to see the DRA scrapped and said it will “add to the fears of more employment tribunals if an employer does need to dismiss an underperforming member of staff.”

Furthermore, the FSB said it could lead could lead to fewer incentives or opportunities to hire and train younger workers.

The changes come shortly after the Government announced the state retirement age will rise to 67 earlier than planned.

The retirement age could rise to 67 as soon as 2026 – 10 years earlier than planned.

Steve Webb, the pensions minister, said: “Everybody knows we are living longer. It’s like an express train. I am even more convinced now than I was a year ago that we are running to stand still on all this stuff. In a world [where] you are going to live into your late 80s, and before we know it [into your] 90s, we think now we have got to move on these things.”

The Department for Work and Pensions said the exact details are still in the early stages.

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