Compulsory retirement on grounds of age should be scrapped, the Institute of Directors (IOD) said yesterday, claiming that the measure would “forestall the UK’s looming pensions crisis.”
In a statement, the IoD said that an NOP survey of its members said they opposed staff being compulsory pensioned-off when they reached a certain age.
The IoD added, “most employers expect the average retirement age to increase over the next two decades, with only 20 per cent believing the current average retirement ages (64 for men and 61 for women) would stay the same.”
Miles Templeman, Director General of the IoD, said: “We all know that demographic changes will radically affect our pensions position. Abolishing a compulsory retirement age could certainly help in easing the problem. From our research there seems to be a genuine belief amongst employers that many of their staff will want to work for longer than the current law allows. Ultimately, what we need most of all is flexibility in the system.”
But the IoD believes that the move would be “only one of a number of reforms necessary to ensure adequate pension provision in the future”, adding that “a radical simplification of the whole pensions system, enhanced employee and employer contributions and increased tax incentives for pensions funds” would also be necessary if a pensions crisis is to be averted.
