Fifth of UK workers forced to retire early

Feb 18 2008 by Nic Paton Print This Article

By the time we hit our sixties it'd be nice to think we'll have earned the right to retire at a time of our choosing and on our own terms. But for one in five British workers the reality is very different.

A study by insurance firm AXA has found thousands of retirees reporting being pressured into quitting their jobs early by their employers.

Age discrimination legislation introduced in the UK in 2006 made discrimination on the grounds of age unlawful but it did not scrap the national default retirement age of 65, as many age campaigners had wanted.

Many employers have unilaterally got rid of their retirement age but many others have retained theirs.

The laws make compulsory retirement under 65 unlawful unless an employer can objectively justify it.

They also include a right to request to work beyond 65 or any other retirement age set by the company, with the employer having a duty to consider such requests.

A challenge to the legal retirement age by charity Heyday will be heard by the European Court of Justice later this year

But the AXA poll found three out of five UK retirees retired before the minimum legal age of 65 anyway.

Whilst most eight out of 10 did so through choice, one in five experienced pressure from their employer

If all these workers were to take their case to an employment tribunal, the collective cost to the UK could be a massive 45m, it added.

One positive from the new laws, however, was that the number being forced into early retirement by their employer had fallen since 2006 by more than a quarter.

Steve Folkard, head of pensions and savings policy at AXA, said: "Despite legislation making it unlawful to discriminate against workers on the grounds of age, our study clearly shows that some employees are still being coerced into early retirement; meaning employers could be leaving themselves dangerously exposed to litigation.

"Employees coming up for retirement need to be aware of their legal rights and exercise these if necessary. Employers should also review their retirement policies and decision making processes to make sure they are protected against both future and retrospective claims.

"The cost of a successful claim can be significant and will be even higher when legal costs and damage to reputation are taken into account," he added.

The research also showed UK workers more likely to retire early through choice (48 per cent) compared to the international average (36 per cent).

This was almost double the numbers that retired early in both France (23 per cent) and India (a quarter).

Workers in Canada (73 per cent) and America (56 per cent) were the most likely to have retired early.

In addition, around half of those still working (47 per cent) and those retired (49 per cent) did not approve of raising the minimum age of retirement.

However, since the study was last conducted in 2006, there had been an increase from 19 per cent to 27 per cent among those retirees in favour of increasing the minimum age of retirement.

More than half of UK workers expected to work in some shape or form in retirement.

But only a tenth went as far as taking up a second job in retirement.

"The results suggest that Brits are reluctant to see the age of retirement raised, and a significant number have already retired early," said Folkard.

"It is interesting to note how many people think they will continue to work but subsequently do not; perhaps once they hit retirement they decide they want to make the most of their 'golden years'," he added.