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Retirement Age

The Government is consulting UK businesses about the raising or abolition of the default retirement age of 65.

In September the High Court ruled that the UK’s default retirement age was not a breach of European discrimination law. In doing so, however, it also made the point that the decision was influenced by the fact that the Government was considering raising the retirement age.

The case challenging the retirement age was brought in 2006 by Heyday, part of Age Concern. It challenged the Employment Equality (Age) Regulations 2006, claiming that that the laws were incompatible with the European Union’s Equal Treatment Directive because including a compulsory retirement age was discrimination against people on the grounds of age.

The case was referred to the European Court of Justice which said that compulsory retirement ages could be legal if they were “a proportionate means of achieving a legitimate aim”. It left the High Court to decide if that was the case in the UK. The High Court concluded that it would not rule against the Government while a review was pending but commented that, had such a review not been pending, it would have ruled that the selection of age 65 would not have been proportionate as it creates a greater discriminatory effect than is necessary on a class of people who both are able to and want to continue in their employment.

The Department for Business, Innovation and Skills has now begun a consultation process with UK businesses, asking for submissions by 1st February 2010 as to the anticipated costs and benefits of raising or abolishing the default retirement age.