The UK Government has signalled its intention to scrap compulsory retirement rules. The response to a poll conducted by Right Corecare shows that many people are not sure whether this is a good or a bad thing, and opinions are also divided in society as a whole. So this month, we take a look at both sides of the debate, and provide an overview of the views so far....
It's a good idea...
The Argument: It makes no sense to fix an arbitrary retirement age. People differ in the way they view retirement and to suggest that everyone should stop at 65 is unfair to those who would prefer to continue working. For many people, work isn’t simply a functional activity it is also pivotal in meeting psychosocial needs as well – in fact there is some suggestion that the loss of this element can lead to early death. One major research paper (Tsai et al. Age at retirement and long term survival of an industrial population: prospective cohort study. BMJ (2005) 331(7523):995) showed that people who retired at 55 had a worse mortality rate than those who continued working.
Another significant factor is talent retention; older, experienced employees are often holders of important knowledge, either technical or intellectual, which is important to the organisation. A system that encouraged people to remain at work but in a capacity that enhanced their ability to share skills and knowledge with less-experienced employees is surely a benefit to all.
We have all read about the pensions crisis; an economist recently referred to the state of pensions as a giant Ponzi scheme – eventually it will be completely unable to pay out. It makes sense, then, that people stay at work as long as they can, economically and financially productive, before becoming dependant on a diminishing pension pot. In fact, by working and contributing longer they may well redress the shortfall
Scrapping DRA is a bad idea...
The Institute of Directors, said: "We greatly regret the government's decision to abolish the default retirement age. "We do not see how the removal of a mechanism that gives employers flexibility in managing their workforce is compatible with the government's stated desire to boost enterprise and de-regulate the employment arena." (source: BBC News 29/7/10))
The Engineering Employers Federation says it is being rushed in too quickly and will create havoc with workforce strategic planning
Both the Confederation of British Industry (CBI) and the British Chambers of Commerce have expressed strong reservations about the change, saying it will add to the burden of employers and slow the recovery from the recession.
Some people also say that people should be encouraged to retire at 65 so that they will have time to enjoy their later years without having to work, that it is a time for leisure. They disagree with the concept of vertical lifespan (in which several elements may continue alongside each other throughout life) and prefer a more traditional stepped approach typified by education/employment/retirement.
Don’t Know
There are also a number of people who are unsure. They feel financially vulnerable, so that continued employment may offer a greater reassurance, but would probably choose to retire earlier under different financial circumstances.
Finally, for the moment, there is the issue of family and partners. Many people consider retirement as an ideal opportunity to spend more quality leisure time together; despite the music-hall jokes the suggestion is that this is a key component of retirement that may be lost when the regulations change.
Your Views
We would love to hear what you think. Will the change in regulations mean you make different choices about retirement? Do you feel you would need to continue working for financial reasons alone? What do you think about the idea that older workers may occupy more of a consultancy/mentoring role? Suggestions on a postcard (or just in the comment box) please!