By Di Spencer, Pf Web Editor
No one wants to think about getting old, but with state pension provision likely to dwindle in the future, ‘planning for retirement’ is becoming an all-important financial priority.
The government’s decision to remove the default retirement age (DRA) will take effect in a few weeks (5th April) and will mean that employers will no longer be able to insist that an employee retires, unless there are issues with their ability to perform in their role.
There will be a transitional period however, so that between 6 April and 1 October, only those people who were told before 6 April, and who are due to retire before 1 October, can be compulsorily retired using DRA.
In a recent poll, 66% of visitors to the Pf website said that yes, the removal of the DRA will be good for UK employees.
The government hopes that the change in the law will benefit individuals but also the economy.
The Pf website poll reveals a certain amount of optimism in pharma about the effect the changes will have. On a positive note, the population in generally living longer and enjoying better health in old age, so many people will appreciate the ability to stay in work for as long as they wish to. According to Flexibility.co.uk, 100,000 are forced to retire against their will each year.
Employees may also welcome the new rules due to concerns over pension provision or a lack of savings. Although it is probably advisable now to start a personal pension as soon as you begin to earn, it can be difficult to have that much foresight in your early twenties when there are so many other things you’d rather spend your money on! Removing the default retirement age will give us all longer to save for when we actually do retire, whenever that might be.
Companies have expressed concerns about the pace of the changes and a lack of clarity in some areas. However, it seems that for employees, it’s good news all round.
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