High Court rules to keep retirement age at 65

29/09/2009

The High Court has ruled that the UK employers can continue to force their workers to retire upon reaching the age of 65.

The decision came on the back of a challenge to the existing legislation brought by Age Concern and Help the Aged, which argued that to dismiss a worker at a fixed age is against the EU's Equal Treatment at Work Directive.

Under the current law, employers entitled to force people out of work against their will without having to provide any redundancy pay.

However, while ruling judge, Mr Justice Blake, concluded that the rules concerning compulsory retirement are in compliance with EU anti-discriminatory laws, he noted that there exists a "compelling case" for a change in the law, with workers to be allowed to stay on until they see fit.

Commenting on the decision, John Wadham, legal group director for the Equality and Human Rights Commission, said: "The number of older employees is increasing and the law should support those who wish to carry on working and making an economic contribution."

It is estimated that there are currently around 1.4 million Britons working beyond the state pension age.

Donald Smedley, head of pensions for accountancy firm KPMG in Scotland, said: "Today's ruling piles on the pressure for individuals to ensure that they have adequate retirement savings as rising life expectancies mean that there are more years of retirement to fund.

"According to the estimates that companies are using in their pensions accounting, a 65-year-old retiring today can expect to live until 87 - giving him or her 22 years of retirement."

Kevin Still, director of EuroDebt, added: "EuroDebt has a large number of over 60 clients that will reach retirement age during their Debt Management Plan and will suffer a further loss of income, especially if there is a shortfall in their pension fund.

"Average unsecured debt levels for over 60 clients exceed £29,000, well above the national average of £21,000. Many still have a mortgage to pay until well after their 65th birthday.

"The benefit of a Debt Management Plan is that it is flexible and reflects a client's current circumstances and generally doesn't put their home at risk."

Tags; Retirement Money Problems,

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