The Default Retirement Age (DRA) is to be phased out this year, the government has confirmed. It means employers will no longer be allowed to dismiss staff just because they have reached the age of 65.
The Department for Business said that as well as benefiting individuals, "the freedom to work for longer will provide a boost to the UK economy".
Employers had called for the changes to be delayed for a year to allow greater legal clarity over the plans. Presently, firms can use the DRA to make staff retire at 65.
Ditching the DRA was first proposed by the coalition government in July last year - largely to tackle issues around the ageing population and the shortfall in pension savings. It has now been confirmed following a consultation process. The change means that from 6 April, bosses will not be able to issue any notifications for compulsory retirement using the DRA procedure.
Between 6 April and 1 October, only those people who were told before 6 April, and who are due to retire before 1 October, can be compulsorily retired using DRA.
Finally, after 1 October, employers will not be able to use DRA to force staff to retire. However, although the government is removing DRA, individual employers will still be able to operate a compulsory retirement age "provided that they can objectively justify it".
The Department for Business gives two examples of where this might be the case - for air traffic controllers and police officers.
Employer groups had called on the government to delay introducing the change.
Last month, the CBI warned that firms faced "huge uncertainty" and a greater risk of unfair dismissal claims unless there was more legal clarity over the plans. The group added that the ageing population and the shortfall in pension savings made it inevitable people would want to work for longer.
"However, in certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone," said the CBI's deputy director general John Cridland.
"The DRA has helped staff think about when it is right to retire, and has also enabled employers to plan more confidently for the future."
He said a legislative void was opening up with the scrapping of the DRA.
"In the majority of cases this will not be an issue, but in a minority it will be a serious problem for all concerned," he said.
Unions have also demanded "clear guidance" from both employers and workers to raise awareness of what protection from unfair dismissal and age discrimination older workers will have.
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