Announcement

Default Retirement Age to end this year

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Government has today confirmed that it will remove the Default Retirement Age (DRA) so that people have more choice when to stop working.

The Default Retirement Age is to be phased out between 6 April and 1 October 2011. The Government’s written response to its recent consultation on the issue, and new guidance from Acas to help businesses adapt to the removal of the regulation, have been published today.

Further background information and research together with updated DWP guidance for employers on workforce management without a fixed retirement age is available at : Business Link - Managing without a fixed retirement age

Default Retirement Age

Currently the DRA enables employers to make staff retire at 65 regardless of their circumstances, but the Government feels the rules must change as people are living longer, healthier lives.

The change means that:

  • From 6 April 2011, employers will not be able to issue any notifications for compulsory retirement using the DRA procedure.
  • Between 6 April and 1 October, only people who were notified before 6 April, and whose retirement date is before 1 October can be compulsorily retired using the DRA.
  • After 1 October, employers will not be able to use the DRA to compulsorily retire employees.

Although the Government is removing the DRA, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it. Examples could include air traffic controllers and police officers.

Help for employers

The Government will help employers adapt to the change - it:

  • Has worked with Acas (Advisory, Conciliation and Arbitration Service) on new comprehensive guidance that has been published today.
  • Has provided further background information and research together with updated DWP guidance for employers on workforce management without a fixed retirement age, available at Business Link - Managing without a fixed retirement age.
  • Will remove the administrative burden of statutory retirement procedures. With the DRA gone there is no reason to keep employees ‘right to request’ working beyond retirement or for employers to give them a minimum of six months notice of retirement.
  • Will introduce an exception so that there are not unintended consequences for employers that currently voluntarily offer group risk insured benefits (income protection, life assurance, sickness and accident insurance, including private medical cover). There had been concern that removal of the DRA could lead to increased costs and uncertainty for businesses by in effect removing the cut-off point beyond which such benefits are currently no longer offered.