Ministers will allow employers to set a retirement age at 65 while allowing employees the right to request to work beyond this age; the news has received a mixed response.
Employers' group the CBI has called the decision ‘sensible and pragmatic’ while the Employers Forum On Age (EFA) has lashed out at the government calling it a ‘fudge’.
John Cridland, CBI Deputy Director-General commented: "It means people can ask to work beyond 65 and they will be able to do so unless there is a good business reason why not. This will be a big change from the status quo because contractual retirment ages below 65 will now have to go.
"But it also means there is a clear cut-off point to employment, which is important if you don't want to embitter the retirement process and trigger an explosion of tribunal claims. Neither employers or employees want people to work forever."
Meanwhile the EFA has said the government’s announcement that it will review the age 65 default retirement age in five years time is a failure to make a decision.
The EFA believe that a fixed retirement age is not the right path for the UK in the future.
Sam Mercer, director of the EFA said:
“Employers need clarity. Simply postponing the decision leaves everyone in the dark. After five years of debate we are no further forward and the same arguments will be made in five years time.”