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Daily View: Scrapping the fixed retirement age

Clare Spencer | 09:29 UK time, Friday, 30 July 2010

Commentators discuss the possible implications of plans to scrap the default retirement age of 65.

The the move will bring a change in how people manage their workers:

older people

"For one thing, retirement provides a means of making redundancies without redundancy cheques, but there are also human factors, which go beyond penny pinching. No one wants to tell a long-serving member of staff that they are not longer performing as they once did, and automatic retirement provides one means to avoid such awkward conversations. The proper way around them, of course, is for managers to manage - to appraise carefully what each individual older worker can and cannot do, and where necessary to nudge them away from heavy graft, and towards activities and hours which might provide a better fit."

The that the next step needed is to make it easier to sack unproductive staff:

"In future, however, it will only be possible to dismiss the over-65s for the same reasons as under-65s. That is already the case in America, where older employees are a surprisingly dynamic presence in the workforce. But there is a difference. In the US, sacking incompetent staff - of any age - is not difficult. In Britain, it is difficult, thanks in part to indulgent employment protection laws passed by Labour. The situation is not yet as sclerotic as it is in Europe, where a worker practically has to burn down the office before his or her job is taken away, but that is the direction in which we are moving."

that the right to leave work will turn in to a duty to stay:

"[W]hen the retirement age becomes a matter of choice, won't that put us under strong moral pressure to carry on when we'd rather stop?
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"That's clearly the thinking behind the government's gift of our new 'right', since it will save the country a lot of money if we slog on - £15 billion, according to the National Institute of Economic and Social Research, for every 18 months our average working lives are extended. "

that the move will not allow twenty-somethings like herself to advance up the career ladder:

"One of the supposed benefits of the age-change is that the buying power of those still in employment will further boost an ailing economy, or, as I like to paraphrase it, 'let them eat teacake'. The oldies in the corner offices can keep themselves in chenille socks and Ovaltine, and I'll be out there selling matches and bartering my hair just to stay afloat. But with Mum and Dad firmly ensconced at work, at least I'll be receiving pocket money until I'm about 47."

The director of the Centre of Policy studies that taking away the retirement age will not deprive the young unemployed of jobs:

"Should we fear a generation of bed-blockers sitting tight, denying jobs to the young? Only if you believe that there is a finite pool of jobs in the economy and that for every graduate or school leaver joining the workforce an existing employee must give way.
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"Such a belief has little basis in economics: statistical evidence from the UK as well as other OECD countries shows that increasing the supply of labour improves the rate of economic growth. The more pertinent truth is that the greatest burden on Britain's young people will be the cost of supporting an economically inactive elderly population."

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