Ending the default retirement age will create jobs more for the young

Thursday 13 January 2011

Ending the default retirement age will create jobs more for the young

If we force older workers out, the whole economy will suffer.

The Government's decision to ban employers from being able to sack their staff just for being age 65 is brilliant news. This should have been done many years ago. As the first baby-boomer has reached 65 this year and as millions more will reach that age in the next few years, the labour market has to adjust to reality.

Most people are not old at 65 any more - they are not ready for the scrap heap, work-wise. So why would we want to waste their skills? Some argue that forcing older workers out will create more jobs for the young. This is a misguided argument. In fact, as the baby boomers come up to 65, if they do not keep working, economic output will be lost and increasing numbers of older people will have much less money to spend. If they are forced to live on meager pensions, then they will not be able to provide the spending needed to create jobs for younger people.

A recent Saga Survey of the over 50s showed that nearly half of those not yet retired want to work past the age of 65 and around 7% want to work into their 70s. By allowing them to do so - preferably part-time, we will be improving all our economic futures.

Employers need to adjust the new realities. They will have to assess workers' skills and abilities for the job, rather than retaining the easy option of just getting rid of them because of their age. Such age discrimination has no place in a modern economy. If a worker is fit and able to do their job, or if a worker is not up to their job, then Human Resources managers must find ways to assess and prove this.

The ideal will be to facilitate far more part-time work in later life, with employers and workers having a mature discussion about the best way to retain workers' skills as they reach their 60s. As more of the baby boomers reach this age, it will be beneficial to all of us to keep them in the labour force, producing and earning to support the economy and themselves. If we waste their skills and throw them out of work, without much money to live on, they will have less to spend, create less jobs for younger workers and set in train economic decline.

Well done to the Government for finally introducing this much needed reform.


For more information please contact the Saga Press Office on 01303 771529

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