News: in detail
back to News HeadlinesHewitt sets new retirement age at 70
A new proposal to tackle age discrimination in the workplace could lead to an unofficial raising of the retirement age, according to trade unions, business and pensioner organisations.
The proposal is contained in a long-awaited consultation paper, which recommends that employers should no longer be allowed to force workers to retire before they reach the age of 70.
Other measures include making age discrimination at work unlawful by 2006, so that it will be illegal to refuse to hire, or dismiss someone, simply be-cause of their age.
Under existing legislation, companies can set their own retirement age for when employees become eligible to draw their full company pension.
However, whilst this will still be the case under the proposed changes, the government has stated that staff should not be made to retire before 70.
As a result, many organisations are concerned that employers will use the legislation to tell their employees they cannot draw their company pensions until 70 - effectively forcing them to work longer.
Critics argue that by using the smoke-screen of tackling age discrimination, the government is achieving its aim of raising the retirement age, by the back-door.
Rodney Bickerstaffe, National Pensioners Convention (NPC) president said: "We all want to see an end to age discrimination, not just in the work-place, but in the rest of society as a whole - but this proposal is more about: economics than equality."
"Raising the age at which people can draw their company or state pensions effectively means that the rich will still be able to retire when they choose and the poor will be forced to carry on working till they drop."
"Real choice in retirement can only come about when individuals have got real financial security, and that means having a decent state pension on which they can live," he added.
The government first raised the possibility of increasing the retirement age in its Green Paper on pensions last December. Since then others commentators, including the government's new Pensions Commissioner, Adair Turner, have floated the idea of working until 70.
Ministers are convinced that an ageing population and a growing pensions bill can only be solved by extending the age of retirement - and the age at which the state pension is paid.
In addition, the government has also stated that it wants to shift the burden of pension provision away from the state, to be replaced by a combination of private-sector provision and the individual’s own efforts.
