Ed Davey, Employment Minister of United Kingdom, said the he is planning to permanently scrap rules that provide powers to employers to force workers to retire at 65, a notable process to extend working lives in the nation’s aging labor force.
The British government planed a proposal today to scrap the Default Retirement Age starting in October 2011 today and proclaimed it would seek opinions from various employers and worker unions on how to change the default rules. Some business groups said that the new plans would limit their ability to get rid of workers they no longer need. They said that instead of scraping the the government should extend the ideal age for retirement.
“With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age,” Davey said in a statement in London. “We are committed to ensuring employers are given help and support in adapting to the change in regulations.”
The government wanted workers stay at his work and remain active for longer as it seeks to take pressure off the pensions system. According to the gathered data, approximately 12% of workers are still employed after reaching retirement age this year compared with 7.5% way back in 1990s.
With Britain needing to cut public spending to rein- in a record budget deficit, the plans to end the fixed retirement next year is being seen by some as a tactics to generate more tax.