Employers fear the removal of the default retirement age will increase legal claims

Nearly half of employers (48%) are concerned the removal of the default retirement age in April will lead to an increase in age-related legal claims, according to research conducted by the Confederation of British Industry (CBI) and recruitment firm Harvey Nash.

The Gearing up for growth survey of 330 UK employers showed the majority (79%) of employers use the default retirement age of 65 and only 16% have no set retirement age. Nearly two-thirds are concerned about the readiness of managers to deal with the declining performance of older workers in the absence of the default retirement age.

In addition, 69% of respondents are concerned the change will lead to a greater uncertainty around workforce planning and 60% believed it would create fewer promotion opportunities for younger staff.

John Cridland, deputy director general at the CBI, said: “In most cases employers want to keep on staff beyond 65, because they value their skills and experience.

“The DRA is a dignified way to manage cases where performance is not up to scratch and people are no longer physically up to the job. Abolishing it leaves a huge void, and had the potential to open up the floodgates on age-based litigation.”

For more articles on the default retirement age and pensions