Default Retirement Age consultation Thursday, August 5, 2010 - 16:54

A consultation on plans to phase out the default retirement age by October 2011 has been welcomed by NIACE, as long as more is done to ensure that government and employer training schemes better support older people, providing them with the skills employers need.

Launched by the Department for Business Innovation and Skills and the Department for Work and Pensions, Phasing out the Default Retirement Age is open for contributions until 21 October 2010.

Stephen McNair, Senior Research Fellow at NIACE, said:

"It is good news that the government is proposing to extend the right to work to people over 65 by abolishing the default retirement age. It was always unfair that the Regulations which made age discrimination unlawful in 2006 allowed employers to dismiss people just because they are 65."

"Many people want to work longer, to feel that they are still making a contribution and for the company of workmates. For some it is a financial necessity. A growing number of employers recognise the contribution of experience and commitment which older workers bring, as is shown by the continuing rise in the numbers working after 65, despite the recession."

"It also makes sense to raise the State Pension Age. Without this, the economy will not generate the resources we need to pay proper pensions as life expectancy continues to rise. However, giving people the right to work longer and delaying the date when people can draw pensions, will only work if there are jobs, if employers do not discriminate against older people and if older people have the skills required."

Of course young people need a lot of investment at the beginning of their careers, but we are wasting a lot of talent and motivation by offering so little to people who may well still have 10 or more years of working life ahead.

Stephen McNair, Senior Research Fellow at NIACE

"Sadly, none of these is certain and there is a real danger that these changes will simply redefine people as unemployed, instead of pensioners. There is also an issue of fairness, for while life expectancy is growing for everyone, it is seven years shorter for people who have worked in manual occupations than for high skilled professionals."

Over the next ten years the number of jobs in the economy is predicted to grow, while the number of people aged 18-65 will shrink, so labour demand will be there eventually (predictions from the UK Commission on Skills suggest there may be several million of vacant jobs by 2017). Although it is becoming easier for older people to keep their jobs, age discrimination against job applicants is still fierce. People making recruitment decisions still discriminate, although most senior managers say they value older workers. In addition, most older workers think they are over-skilled for the jobs they do, yet they are much less likely to get training to keep their skills up to date.

Stephen McNair, added:

"Alongside changes to the law and pensions regulations, government needs to help employers to manage their older workers better. They also need to ensure that government training programmes, and employer training both support older people, and provide them with the skills which employers need. At present, for every pound of public and private money spent on education and training for people aged 50-75, £95 is spent on people aged 18-25 and just £3 on people aged 25-50."

"Of course young people need a lot of investment at the beginning of their careers, but we are wasting a lot of talent and motivation by offering so little to people who may well still have 10 or more years of working life ahead."