Most SMEs Oppose Retirement at 65

Most SMEs Oppose Retirement at 65More than three-quarters of small firms have called for the default retirement age to be scrapped as it puts pressure on mature workers to retire when they are not ready, the Federation of Small Businesses (FSB) has claimed.

An FSB survey found that 80% of small businesses do not compel their employees to retire at 65, and 76% believe employees’ retirement should be based on a mutual agreement between them and their staff.

“Small firms are known for employing people who are older, and continuing to employ them beyond the default retirement age,”

said FSB spokeswoman, Sophie Kummer.

“Having a default retirement age can put pressure on an employee who is perfectly capable to consider retiring when there is no need for it.

“However, if the retirement age is scrapped, there needs to be some legal protection for an employer if they want to let an employee go — for example, if they are doing a very physically demanding job and are unable to do the tasks they were able to do when they were younger. Otherwise they risk being taken to a tribunal.

“They should be able to discuss the employee’s ability to continue and come to a mutual agreement as to whether the employee should leave.”

Under current retirement rules, employers can require staff to retire at 65 — although workers have the right to have requests to continue working considered by their employer. Businesses can also set their employee retirement age above or below 65, if a change can be justified.

The Government was due to review the retirement age in 2011 but the economic climate and concern about pensions have prompted the Department for Work and Pensions to bring it forward to 2010.

A Department for Business, Innovation and Skills (BIS) spokesman said that the retirement age was likely to be abolished or increased this year.

“The results of our review will be announced in the spring,” he said.

“We are currently collecting evidence from trade associations, charities and other organisations to help us decide whether to increase the retirement age or scrap it altogether. The social and economic situation is very different from when the retirement age was set at 65, so it is important that we review it. We will look at any evidence that groups such as the FSB submit before the 1 February consultation deadline.”

The default retirement age was retained last year after a High Court ruling in its favour. However, the judge said there was a “compelling case” for a future law change.

(See also Retirement Age of 65 could be scrapped in 2010)

Most SMEs Oppose Retirement at 65

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