The UK Government's review of the UK's default retirement age (DRA) is now
anticipated to result in its abolition rather than an increase. Harriet Harman has
voiced her support for abolition and yesterday The Equality Commission backed
Ms Harman stating that, in its view, the DRA is obsolete and discriminatory.
However, abolition is unpopular with businesses, with 70% of employers recently
surveyed by international law firm Davies Arnold Cooper in opposition. In contrast,
opinion was almost equally divided when asked about support for an increased
DRA - 45% in favour and 55% against.

"The message from UK businesses is that abolition of the DRA concerns them.
They are worried that the implications haven't been properly considered," said
Wendy Trehy, partner and employment law specialist at Davies Arnold Cooper.

Employers expressed a number of concerns – many respondents were concerned
about the potential performance of employees past 65 and what they would need
to do in order to manage this. A further concern was that without a DRA,
employers will have to put their older employees through a formal performance
review procedure and ultimately terminate their employment on grounds of poor
performance or capability, which would mark a sour end to the employment
relationship. Employers are also concerned about the implications for workforce
planning and the impact on development and promotion opportunities.

The survey found that almost 85% of businesses currently use the DRA as their
contractual retirement age. Employers with a lower retirement age primarily do so
for health and safety reasons, but interestingly a small number already have no
retirement age. The majority of employers have received requests from employees
to work beyond their contractual retirement age and have approved the majority of
those requests. Only 12% have refused all requests while most have approved all
or most of the requests received. In the vast majority of cases, the reasons given
by employees for requesting to work on were because they still enjoyed their job
(79%) and for financial reasons (75%) - reasons that mirror the arguments put
forward both by Ms Harman and the Equality Commission.

"The responses also show that many employees beyond the age of 65 retain the
desire to work and can provide a valuable contribution in doing so," said Trehy.
"However, while many employers recognise the need for change and accept that
the DRA is out of date, many are concerned that abolition is a step too far and will
have negative consequences for both them and their workforce."

Further information: contact Rob Dwyer on 020 7293 4139 or rdwyer@dac.co.uk