Firms condemn 'rush' to axe default retirement age of 65

Business chiefs today accused the Government of rushing the scrapping of the default retirement age at 65.

Unions and campaigners hailed the move, which will mean millions of people being able to work into their late sixties and beyond.

But businesses warned it could spark confusion over when people should stop working. At the moment an employer can make workers retire at 65 without paying compensation.

The only requirement is to hold a meeting with the employee to discuss the issue at least six months before their 65th birthday. It remains up to the employer whether to allow the staff member to carry on working. But ministers are planning to axe this default retirement age rule in October next year. It means that the changes will come into force in April, as managers need to give the six months' notice.

John Cridland, deputy director-general of the CBI, said: "The decision to abandon the default retirement age leaves business with many unresolved problems, and the Government's timetable to scrap it will give companies little time to prepare."

Employment relations minister Ed Davey said: "People are living longer lives, living healthier lives and we think it's out of date to force them to retire at 65. We want to end this discrimination." Staff could still be asked to quit if they were unable to do the work, he added.