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Workers are forced to retire too young, say leading employers 28 September 2000 Shortage of management skills prompts campaign for urgent Government review of pension rules Some of Britain's largest employers today (28 September) join a campaign to stop older workers being forced to retire too early. Current Inland Revenue rules are preventing British businesses from offering flexible retirement to those who want to continue working, and it is hitting the UK economy hard, according to the Employers Forum on Age (EFA). Howard Davies, chairman of the Financial Services Authority and the EFA, will launch the initiative with some of the UK's leading employers including Sainsbury's, BT, B&Q, BA, Nationwide and Manpower. The EFA's report, Delivering Flexible Retirement, published to launch the campaign, argues that the Government's failure to tackle outdated Inland Revenue rules - in particular preventing staff from drawing part pension and part salary - will lead to even greater skills shortages. It criticises the public sector's record on retaining older staff and calls for the Government to ensure staff understand the flexible retirement options available. According to the report, there is no longer a uniform model of retirement. The UK population is ageing, we are living and staying healthy for longer, and it is likely that future working lives may consist of a series of retirements and re-entries into work. Many employers feel the word retirement carries outdated connotations and they argue that it should no longer be regarded as an abrupt end to working life. Sam Mercer, campaign director of the EFA, says: 'The Government's recent immigration initiative could well help to close the skills gap. A rise in immigration would boost the UK workforce, but it's not enough on its own. If the Government is serious about addressing the skills shortage and the widening poverty gap, it should also look at those older workers who want to remain economically active but are held-back by inflexible and outdated retirement policies.' Jessica Bone, co-author of the report, says: 'The need for flexibility in retirement and pensions policies has never been greater. Within five years, 36 per cent of the labour force will be over 45, and by 2010 the figure would have grown to 40 per cent, yet only 17 per cent of those at work in five years will be aged between 16-24. With the annual cost of inactivity among over 50's lying at £26 billion, the UK simply can not afford the current trend of premature retirement.' Since the EFA's publication of its first retirement report, The Modernisation of Retirement, the Government has proposed to allow more flexible retirement by modernising tight tax rules on pension payments. In its own Performance and Innovation Unit report, Winning the Generation Game, published earlier this year, the Government recommended that the Inland Revenue and Department of Social Security urgently review the rules on taking a pension while remaining with the same employer. The Inland Revenue failed to meet the deadline of March 2000. EFA is pressing for Government to take action now to remove those barriers and to enable people to remain in work for longer if they choose. At the EFA's fourth annual conference in June 2000, members challenged Alistair Darling MP, Cabinet Champion for Older People and Secretary of State for Social Security, on occupation pension schemes and flexible retirement issues. One delegate raised concern that their business 'risks losing older trade experts and knowledge workers around retirement age', pointing out that these people don't want to claim a full pension, but just to top up reduced hours income. back to the archive |
