In financial services we have been assailed in the past few years with longevity and employment statistics and research.
I am sure this will continue.
What we do know is that the days of automatic retirement at 60 or 65 have gone.
On a number of occasions pensions minister Steve Webb has announced the need for a cultural shift as older workers become accustomed to remaining in the workforce for longer. In order to accommodate this, it is likely the future world of employment will look to benefit from retaining the skills of older workers.
Mr Webb said: “We need to get used to the idea of longer working lives but we cannot just jack up the pension age and ignore the labour market.”
Recent figures from the Office of National Statistics suggest the number of people aged 65-plus who are still in employment has, for the first time, reached 1m.
Coinciding with the release of the report the DWP commented: “Enabling older people who can work, to stay in work is critical to the economy and pensions sustainability – and to the financial, health and social wellbeing of individuals.”
Alongside this, a recent report from the Institute of Economic Affairs (Work Longer, Live Healthier: The Relationship Between Economic Activity, Health and Government Policy) looked at the relationship between retirement and health. It found that working longer could be good for health, while retirement could bring on a variety of medical conditions.
So, working longer could be good for your health and good for your finances if you have not yet got sufficient resources to fund that long retirement. But what does this mean from a societal point of view?
It means creating new jobs, but also encouraging employers to make it easier for existing employees to continue working.
The introduction of legislation to make age discrimination illegal culminated recently in the removal of the default retirement age. This means employers can no longer force an individual to retire, as doing so could be age discrimination.
The legislation took effect in April 2011 and, in theory, means employers can no longer use a default retirement age to enforce a compulsory retirement strategy for their workforce.
The aims of the policy seem logical. In the words of the government, it will “reinvigorate retirement” and encourage people to work longer, particularly with increasing longevity. In practice, the idea is perhaps less easy to implement.
A number of cases in Europe and the UK show it is still possible for employers to argue that a default retirement age is objectively justified and is a proportionate means of achieving a legitimate aim.
Law
This takes us into the realms of employment law and the definition of objective justification.
If employers cannot force staff to retire due to age, then they may seek other ways of terminating employment – for example, through questioning an employee’s conduct or capability, or making them redundant.
