Default retirement age of 65 is lawful
07 October 2009
Does your organisation, like most, have a retirement age of 65? Although this is lawful for now, it may need to change in the near future.
The High Court has held that the default retirement age of 65 is lawful and rejected the challenge by Age UK, known as the Heyday challenge.
However, the court thought there was a compelling case for the default retirement age to rise and made a number of comments which suggest that it may not remain at 65 for much longer.
The Government had already announced that it was bringing forward a review of the default retirement age to 2010 and the outcome of the challenge might have been different if the Government had not announced its timely review.
The Government succeeded in satisfying the High Court that a default retirement age was a proportionate means of achieving legitimate social policy aims such as securing the integrity of the labour market and short-term competitiveness. However, the judge in the case said that he could not see how the default retirement age of 65 could remain after the review.
Therefore, while a default retirement age of 65 remains lawful for now, it may not remain so for much longer.
The decision does not have an immediate impact on pension schemes. However, it is another strong indication that, in the medium term, schemes will have to accommodate older members. The rules about how and when they can draw their pensions will probably need to be more flexible.