Page last updated at 12:49 GMT, Monday, 11 January 2010

Retirement age rules 'arbitrary' says Harriet Harman

Elderly man working in Asda
Some employers encourage people to work beyond 65

Labour deputy leader Harriet Harman has signalled a wish to change the law that would allow people to work beyond the age of 65.

In the UK, a worker can see their employment end at the age of 65 without any redundancy payment - even if they do not want to retire.

But Ms Harman called the retirement age "arbitrary" and suggested a "massive policy change" was in the offing.

A review of the rules had already been brought forward to this year.

Court decision

In a high profile case last year, the High Court ruled that the Default Retirement Age introduced by the government in 2006 did comply with an EC Directive against age discrimination.

In the UK, a worker can see their employment end at the age of 65 without any redundancy payment - even if they do not want to retire.
A number of court cases have taken place that challenge this rule, most notably the case spearheaded by Age Concern and Help the Aged which was rejected by the High Court in September
However, the government has said it will review the retirement age during 2010, a move that some commentators say signals the end of the default retirement age in the UK as we know it.

However, Mr Justice Blake also said that there was a "compelling case" for a change in the law.

In an interview with the Daily Mail, and in a speech to charity Age Concern and Help the Aged, Ms Harman appeared to echo this view.

"The retirement age is arbitrary, it bears no relation to people's ability. Think of people running their own business - they do not shut up shop suddenly when they reach the age of 65," she said.

"People are remaining active and healthy well into their older years. But at the moment there is no legal backing for you if you want to stay at work, so what we are proposing is a massive public policy change.

"We do want people, if they want to, to be able to stay working for longer and flexible working is a way that enables them to do that."

In her speech, she said that it was time to take a fresh look at the rules.

"We want to give older people flexibility with their retirement options," she said.

She also appeared to coin a new term by suggesting politicians must do more for the "welderly" - the well and active elderly.

View from business

Employers have consistently challenged this view. They feared a string of compensation cases brought by people who did not want to retire.

Some argue that there are adequate rules in place already and the British Chambers of Commerce has appealed for time for these rules to bed down.

Employees have the right to request to continue working beyond the date when the employer wants them to retire, but the employer can refuse the request and the law does not require them to give any reason for that decision.

An employer can also refuse to recruit anyone over the age of 65.

Chris Ball, of the Age and Employment Network, said that older people were looking to delay retirement owing to the effect of the recession on savings and pension pots.

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Financial TimesHarman signals end of retirement age - 17 hrs ago
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This is Money Working past retirement age: your rights - 28 hrs ago
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