Retirement age - the Default Retirement Age in the UK and details of its abolition
Retirement from work is when you stop employment completely, usually due to age, and fill your previous work time with leisure activities.
Most people retire at 65, although some stop working at a younger age either due to their type of job or through choice.
What is the Default Retirement Age?
The Default Retirement Age or DRA came into force in 2006 and it gave employers the right to force their employees to retire at the age of 65 without giving a reason as to why they were doing so. This was the employer's legal right and although many employers may have used it, not all exercised their right to do so.
Since 2006 many groups and organisations have campaigned and petitioned to scrap the DRA as they deemed it discriminatory and totally unfair that people could not choose when they stopped working.
When was the DRA abolished?
The British Government announced plans to scrap the DRA in July 2010, as MPs recognized its unfairness and concurred that it should be up to the individual when he or she decides to stop working completely. It was also thought that this plan would help tackle the matter of the ageing population, as people are living longer and are maintaining their health for longer, therefore able to work for longer if they so wish.
On 13th January 2011 the Employment Minister confirmed these plans and ploughed full steam ahead with implementing the abolition. Due to legalities and other considerations, it was decided that there would be a six-month transitional period during which the Default Retirement Age would be phased out. This transitional period began on 6th April 2011 and is set to fully finish on 1st October 2011.
However, employers may still be able to force employees to retire due to their age, but they must have a "fair" reason for doing so and be able to prove it.
The transitional phase
The transitional phase runs from 6th April 2011 until the last day of the Default Retirement Age in October 2011.
From the start of the transitional phase, no employer may give notice to any employee using the old DRA procedure and the last official date of doing so was 5th April 2011.
Only those employees that were given notice before 5th April 2011 will retire compulsorily using the DRA system and the last date that an employee will retire in this way is 1st October 2011.
An employer must have given a minimum of 6months notice and a maximum of 12 months notice by 5th April 2011 and this will only apply to all those employees that have turned 65 by 30th September 2011 inclusive, otherwise they cannot be retired by DRA. Just to make it clear, nobody with a 65th birthday after 30th September 2011 can be forcibly retired using the DRA system.
The last day to give an official retirement notice was 30th March 2011 but employers could still use the DRA up until 6th April, only by employing the "short notice provisions", under which an employee could claim compensation.
During this transitional phase, employees can request to continue to work indefinitely or for an extension period of six months but it is up to the employer whether he agrees to this, although he must consider the proposal fairly. The employee must have put in his request more than three months of the expiry of the retirement notice. The request must be in writing and it must state whether the employee would like to continue to work for six months, indefinitely or until a specified date.
This request to continue to work longer may be followed by a meeting with the employer in which reasons why the employee wishes to carry on working must be discussed. The employer may agree to the request or reject it, as well as suggesting a different work schedule or a different retirement date.
The employer's decision should always be given in writing with the date clearly shown. If the employee disagrees with the decision, he is well within his rights to appeal. The appeal will consist of a second meeting with the employer, who once again, will give his final decision in writing.
What will this mean for the over 65s?
So, from 1st October 2011 all those over the age of 65 that want to continue to work can legally do so and cannot be forced to retire purely on an age basis.
They will have the same benefits as those of a younger age, and the choice to continue working will not affect their state pensions and the age at which they can be collected.
Of course, if people choose to retire at 65, they are also entitled to do so and will not be forced to work longer than they want to either.