The EHRC (Equality and Human Rights Commission), has declared that it is time for the government to scrap the default retirement age. They also stated that the government should extend the right to request flexible working to all employees, and consider introducing incentives for flexible employers, especially those over 50.
There is no fixed retirement age for people in the UK, but the law allows firms to force staff to finish work at 65. The government is already taking steps in order to change this rule, which will benefit thousands of workers that wish to keep active past 65, whether because they like their jobs, or simply because they cannot afford to stop working.
While there are other short-term options to access cash such as pension release, keeping on working past the retirement age, is a much more effective solution in the long run, and will also contribute towards a bigger pension when retirement takes place.
Indeed, according to a survey, around 60% said they wanted to continue working but on a part-time basis, while 40% said they would like to stay in their current jobs but with greater flexibility in hours worked.
In case this change takes place, the economy would be the most benefited from it. A research carried by the National Institute of Economic and Social Research suggests that extending working lives by 18 months would earn Britain £15bn.
Those working past State Pension age can choose whether or not to claim their State Pension at the same time as they are working. Also they don’t pay National Insurance, and if they work past 65, the Government takes less from their pay packet in tax.
Regarding this matter, the Commission’s deputy chair, Baroness Margaret Prosser, said: “It is time to move away from systems put in place when people died not long after reaching state pension age.
“Britain has experienced a skills exodus during the recession, and as the economy recovers we face a very real threat of not having enough workers – a problem that is further exacerbated by the skills lost by many older workers being forced to retire at 65,”
“Keeping older Britons healthy and in the workforce also benefits the economy more broadly by decreasing welfare costs and increasing the spending power of older Britons.
“Our research shows that to provide real opportunity to older workers, abolishing the default retirement age needs to be accompanied by a concerted drive by government, employers and agencies to meet the health, caring and work needs of the over-50s to enable them to remain in the workplace. Greater flexibility can help to deliver this.” she said.