Default retirement 'costs UK economy £3.5bn'

Friday, April 30th 2010

Britain's economy is being impacted financially due to forced retirement, it has been claimed.

Michelle Mitchell, Age UK charity director, said: "It also causes real harm to our economy and public finances by depriving the labour market of experienced, skilled workers who would otherwise be paying taxes."

She stated forced retirement is "unfair" and "outdated", with 90 per cent of older workers opposed to the legislation.

And it costs the UK economy £3.5 billion every year, the charity noted.

Some 120,000 older workers were forced to retire in 2009 and they lost a total of £2 billion in earnings.

While the three main political parties have pledged to change the default retirement age, the Conservatives and Labour have not stated they will completely scrap forced retirement, which the charity advised them to commit to.

Directgov offers guidance for those nearing retirement and says state pensions can be boosted by paying voluntary National Insurance contributions or by working slightly longer.