Millions of older people will be able to lengthen their working lives under proposals from the equalities watchdog to scrap the compulsory retirement age of 65.

It says that the current law discriminates against older people, and that extending the working lives of older people would pump £15 billion into Britain’s ailing economy.

The Equalities and Human Rights Commission (EHRC) has promised to make reform of the retirement age the focus of its pre-election campaigning, intensifying pressure on all parties to adopt it as policy in their manifestos.

Saga, the holiday and financial services company for the over-50s, and a strong campaign group, has also called for the retirement age to be scrapped. It points out that more than 80 per cent of its customers say they will definitely vote.

The EHRC proposals are backed by a survey into older workers’ aspirations. A quarter of men and two thirds of women aged over 50 say that they want to carry on working beyond the state pension age. Although demand for flexible work was high, the survey found that plenty of employees were unhappy at being offered only lowerlevel part-time work beyond 65. Twice as many want to be promoted as want to downshift.

The Government reluctantly agreed to review the so-called default retirement age after it was criticised in a high-profile court ruling. In a case brought by the charity Age Concern, the High Court ruled that the default retirement age introduced by the Government in 2006 did comply with an EU directive against age discrimination. Mr Justice Blake also said, however, that the case for changing the law was compelling.

Harriet Harman, the Equalities Minister, has signalled that she would like it scrapped, but the business community is arguing that it cannot cope with more changes in the law and needs to be able to renew its workforce without facing costly tribunals.

Although the Conservatives have no policy on the retirement age, they have pledged to bring forward a rise in the state pension age to 66 by 2016 for men and 2020 for women. Under current pension reforms, the pension age will increase to 66 for both men and women in 2024.

The default retirement age allows employers to require that all staff retire at 65, regardless of their circumstances. Staff can appeal against the decision. Currently 1.3 million people work beyond state pension age. David Frost, director-general of the British Chambers of Commerce, said: “Employees already have the right to request to postpone their retirement, and the existing rules allow for the fairest outcome on both sides. Having a default age is a crucial trigger point for a conversation between the employer and employee about their future.

“If the default age is to be abolished, it would happen in 2011, even though there are already five new employment laws due to be implemented that year. Businesses need a period of stability to allow all the recent changes to employment legislation to bed down. They do not need more tinkering with employment law.”

Baroness Margaret Prosser, deputy chairman of the EHRC, said: “Radical change is what older Britons are telling us needs to happen for them to stay in the workforce. Employers with a focus on recruiting and retaining older workers on flexible working arrangements are telling us it makes good business sense, allowing them to recruit and retain talent while meeting the flexible needs of their customers.”

The world at work ...

•  In most of Europe workers retire at 65, but in France it is 60
•  In the US, retirement is commonly at 66. However, 20 per cent of the US workforce continue to 69, double the proportion at that age in any European country
• Men and women share the same retirement age in some countries, but in Russia women retire at 55 and men at 60
• Japan originally retired its workforce at 60, meaning that one in three would have retired by 2015 — so it will rise to 65 by 2013
• The Netherlands plans to raise its retirement age to 67 

Article from The Times