Retirement Age Rules about to Change?

29th January 2010
Retirement Age Rules about to Change? image

Retirement Age Rules about to Change?

The Current Law

Currently a worker in the United Kingdom can see their employment end at the age of 65 (the default retirement age) without any redundancy payment, even if they do not wish to retire.  In essence all that an employer needs to do is serve the employee with 6 months’ notice and follow a fairly limited procedure.

In a high profile case last year, known as the Heyday Challenge, the High Court did rule that the default retirement age of 65 introduced by the Government in 2006 did comply with an EC Directive against age discrimination.  However Mr Justice Blake did say that there was a “compelling case” for changing the law.

The Government Push for Change

Recently the Equalities Minister, Harriett Harman, signalled an intention from the Government to change the law to enable people to work beyond the age of 65.  She also stated that it was the intention of the Government to push the law through as soon as possible.  It is believed that currently an Equalities Bill is before the House of Lords for its consideration.

Whether or not the Government is able to change the law in the near future, bearing in mind the forthcoming General Election, remains to be seen.  If it does then the default retirement age may be increased to say 68 or above, or possibly even be removed completely.

Reasons for Change

It is felt by many that the default retirement age is arbitrary and bears no real relation to people’s ability.  Many workers are remaining active and healthy well into their older years.

Furthermore many workers feel the need to continue to work in order to combat the effects of the recession and due to the fact that many pensions are insufficient.

It is believed that the Government supports a change in the law since it will help to reduce welfare costs, and will bring about increased spending power amongst older generations.  It is also believed that it will keep more skilled people in work for longer, which can only benefit the economy.

The proposed law changes have recently received backing from the Federation of Small Businesses and the Equality and Human Rights Commission.

On the other hand many employers are opposed to such changes.  They fear a string of compensation cases to be bought by people who do not want to retire.  They feel that there are already adequate rules in place.  For example, under current law, employees do have the right to request to continue to work beyond their default retirement age (or the date when the employer wants them to retire).  The employer can refuse the request though, and the law does not require them to give any reason for that decision.

Maples’ View

Employment Partner Daven Naghen recently commented as follows:-

“Obviously it is not known with any certainty whether or not this Government will push through the law changes, bearing in mind that there is a General Election in the pipeline.

Until any proposed changes are turned into legislation, I would suggest that employers continue to follow the current law.  Namely if they have an employee that is aged 65 or over, they can (if they so wish) look to retire that employee by following current procedures including the provision of 6 months notice.

However employers should be aware that if law changes do take place prior to the end of the 6 months’ notice that has to be given, it may be that the notice will become void and the new rules will be applicable.

I do think it is inevitable that at some stage the default retirement age will either be increased, or removed completely.  However with the political uncertainty of a General Election, it is uncertain as to when such changes will be implemented.”

Maples are following this matter carefully, and will report further as and when there are any developments.  Please log onto our website for any updates.


How Banks are Cashing in on Wills image

How Banks are Cashing in on Wills

Recent headlines have reported how banks are now cashing in on Wills.

During the 1990s and early 2000s, banks offered customers low cost Wills (or sometimes even free Wills) but the small print allowed the bank to charge extortionate rates to act as Executors. It is reported that banks are expecting billions of pounds of revenue from their Will writing services and administering estates and in some cases their fees have been over £12,000 to administer an estate as they look to charge a fixed fee PLUS a percentage of the deceased’s wealth.

If you or a loved one has made a Will through a bank we would urge you to check who you have appointed as Executors and check any small print which you may have signed. If you are unsure then please speak with one of our lawyers in the Wills and Probate team who can look at your existing Will with you. It may be appropriate to make a new Will which revokes any previous Will you have made which could save your family thousands of pounds when your estate needs to be administered.

In the majority of cases, when someone has passed away we can provide the family with a quote of how much the legal fees will be so that there are no nasty surprises once the administration is complete.

Read More

Testimonials

Gemma Mayer LLB

"I would highly recommend Maples Solicitors, especially Gemma Mayer, for any conveyancing work. The level of support and professionalism was excellent at all times. I also felt if I needed to ask or clarify anything that it was not an issue. Buying and selling a house is stressful enough, but Gemma helped me through it step by step."

Anita Toal LLB BA

"I think you are brilliant. You can use my comments above. You are efficient, friendly and quite clearly very good at what you do. Mainly you don’t leave people hanging around too long for." "So easy to talk to her and she understood what I wanted. She put me at ease and I cant thank her enough"

Daven Naghen LLB

"Daven provided an excellent service, from attending the first interview with me to the final court appearance. He filled me full of confidence that he would defend me to which he did and come out with an excellent outcome in view of my position that I had put myself in."

Faye Blair LLB

Faye was excellent, sensitive and acted very well to the time constraints we faced. Great service and dealt with compassion at such sad times made the process less painful very professional.

Jamie Dobbs ACILEx

Over the last forty years I have cause to deal with many law firms both in a personal and professional capacity, including some ‘top’ London Companies. In all of those dealings I have never found anyone as proactive and so willing to offer help and advice as Jamie Dobbs. During the last two years Jamie guided my parents through the completion of Lasting Powers of Attorney. Helped myself with the use of the LPA and recently dealing with Probate and Estate Administration following their death.

Mike Pepper MA

Mike Pepper gave us excellent advice. He was always most helpful and accommodating giving lucid explanations every step of the way. Thank you Mike.

Claire Smith FCILEx

Claire Smith has been amazing in every way. I highly recommend her and I am so grateful for all her help. She’s professional on all levels, reliable, extremely organised and I will be recommending her to everyone. I’m very lucky to have had her representing me and I can’t thank her enough. She is an asset to Maples. Thanks so much Claire!