Employers have not been able to easily dismiss employees for retirement for a few years now thanks to employment law changes. This means that employees are choosing to work later into their sixties and even into their seventies. We have had two clients in the last year who were unfairly dismissed as they reached retirement age, with employers assuming that they would want to retire.
Not all employees want to continue working at this age though. Older employees may be worried as the Pensions Policy Institute (PPI) casts fresh doubt on the accessibility of their pensions. The PPI fears that many may miss out on their pension altogether. It has suggested that taxpayers with 45 years of work under their belts should be entitled to an early retirement. According to the thinktank, this would allow up to 250,000 individuals to enjoy a much-deserved post-work life after their careers have ended.
With successive governments’ employment law policy increasing the state pension age to 67 for both men and women by 2028, the future looks somewhat grim – many workers will likely die before reaching retirement. Although average life expectancy is rising, many UK employees will still likely be penalised by the change.
According to Age UK, those with low life expectancies and low incomes will suffer the most from this employment law change.
Mitigating the effects of increased State Pension age
Age UK has proposed policies to help minimise the downsides of an increased working age, including:
- Allowing early access to a reduced state pension. This is already an option in the USA and ensures that people can take a smaller pension in return for an earlier retirement.
- Allowing those with disabilities and/or care responsibilities to access their state pension early.
- Unlinking Pension Credit and the state pension age so the age at which Pension Credit is received can remain at 65.
By Leona Grant