Government Plans to Scrap the Forced Retirement Age at 65 by October 2011

U.K. Employment Minister Ed Davey said he plans to scrap rules that allow employers to force workers to retire at 65, an effort to extend working lives in the nation’s aging labor force.

The government outlined a proposal today to scrap the Default Retirement Age starting in October 2011 today and said it would seek views from employers and unions on how to change the rules. Employer groups said the plans would limit their ability to get rid of workers they no longer need. They said the government should lift the retirement age rather than scrap it.

“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 wants workers to remain active for longer as it seeks to take pressure off the pensions system. About 12 percent of workers remained employed after reaching retirement age this year compared with 7.5 percent in the 1990s.

With national debt forecast to increase to about 70 percent of gross domestic product by 2014, the government is seeking to impose the biggest cuts to spending since World War II. Welfare has been targeted as one of the main areas for savings.

To contact the reporters on this story: Gonzalo Vina in London at gvina@bloomberg.net

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