In the next few years we will see the baby boomers reaching retirement age. There are already nearly 10 million people in the UK aged 65 and over and it is no longer uncommon for people to spend up to a third of their life in retirement. Combine our ageing population with the unprecedented economic challenges now facing the public purse, businesses and individuals, and it is not surprising that the working life of older people has become a hot topic.

Age has been grabbing the headlines over the past few months, most recently with Harriet Harman bestowing a rather annoying new label on the cohort of healthy, active, older people, the “wellderly”. Last year it was the finding of the High Court, following years of wrangling which went all the way to the European Court of Justice and back, that the default retirement age in the Employment Equality (Age) Regulations 2009 was lawful. The Age Regulations allow employers to retire employees against their will at 65 as long as they follow the correct procedures. Whilst employers are not compelled to retire employees at this age, the law certainly makes it easier.

In the next few years we will see the baby boomers reaching retirement age. There are already nearly 10 million people in the UK aged 65 and over and it is no longer uncommon for people to spend up to a third of their life in retirement. Combine our ageing population with the unprecedented economic challenges now facing the public purse, businesses and individuals, and it is not surprising that the working life of older people has become a hot topic.

Whilst ageing is itself unavoidable, the way in which we live our lives, including our working lives, is something over which we generally wish to exercise personal choice and control but Government intervention and society’s long-held prejudices affect the extent to which this is possible.

The High Court noted in its judgment that there was now a ‘compelling’ case for setting the default retirement age higher than 65 and that it had taken into account the Government’s decision to bring forward its review of the default retirement age to 2010. The Government is currently calling for evidence to feed into the review. Where this review will lead is anyone’s guess, particularly given the proximity of the election, but Harriet Harman’s recent comments on the subject suggest that the Government is minded to increase, if not abolish the default retirement age. The Commission for Equality and Human Rights hopes to short-circuit the review by convincing the Government to use the Equality Bill to abolish the default retirement age. The Equality Bill, which could receive Royal Assent in April, would consolidate all discrimination law, including the Age Regulations, into one Act of Parliament. In a survey of UK employers, the Chartered Institute of Personnel and Development found that over 40 per cent wanted the default retirement age scrapped with immediate effect. Some employers’ bodies continue, however, to oppose a change.

So, from 2011, changes to the law may mean that forced retirement will be unlawful but will the old but fit be welcome in the workforce?
Aside from forced retirement, the Age Regulations allow employers to refuse to hire someone over 65, or the employer’s normal retirement age, without having to justify it and to refuse to consider an application from anyone who applies for a job within six months of their 65th birthday (or the employer’s normal retirement age if this is over 65).

Even if it the law is changed, it can only do so much to prevent age discrimination. In order for there to be equal opportunities in the workplace, including in terms of ensuring that older workers have the same access to training, stereotyped assumptions about older people and concerns over the difficulties of dealing with a reduction in productivity over a number of years, will need to be dispelled.

Whilst older workers may wish to continue working, they may not want to be bound to work in the same way. To have the right to request to work flexibly, a right which is already available to some employees, including those with young children, would no doubt be of assistance. If this right could be extended to older workers, as Harriet Harman has recently suggested, it could offer a less abrupt end to working life. The option to be involved in a coaching or mentoring role, or a transition to contracting or consulting could offer further flexibility and encourage older workers to remain in the workplace.

But what does the future hold for those, wellderly or not, that would like to retire? One of the most significant potential barriers to people living a happy and fulfilled later life is the uncertainty about the financial future, will they have enough to live on after they stop work? A series of legislative changes will have consequences for those wishing to retire.

• Both the Government and the Conservative Party have proposed the restoration of the link between the State Pension and earnings. The Government has pledged to do this by 2010 or the end of the next Parliament at the latest.

• From 6 April this year, the number of years required to build a full basic State Pension will be reduced to 30 from the 44 normally required for men and 39 normally required for women.

• State pension age will rise to 65 for women by 2020 and for men and women to 68 between 2024 and 2046. In a move that has caused concern to age charities, the Conservatives have said that they will review the state pension age, to consider whether the increase in the pension age from 65 to 66 should be brought forward from 2026, but starting no earlier than 2016 for men and 2020 for women. As 45% of pensioner couples and 73% of single pensioners receive over half their income from state pensions and benefits, changes to the State Pension Age will have far reaching effects.

• The Government has relaxed the tax rules to enable employers to offer their employees the option of flexible retirement. It is now possible to draw an occupational pension (as long as the scheme itself allows it) while continuing to work for the same employer. Further flexibility has been provided by allowing deferral of the State Pension and the receipt in return of either a lump sum or an increased State Pension. On the other hand the normal minimum pension age for occupational and personal pension schemes will rise from 50 to 55 on 6 April 2010. After that date, a special reason, such as serious ill health, will be required if an individual wishes to begin drawing their pension before the age of 55 without paying extra tax.

• In 2012, employers will be required to automatically enrol all eligible workers into a qualifying workplace pension and to contribute at least 3% of the worker’s qualifying earnings to that scheme. There will also be tax relief of around 1% and an employee contribution of 4%, taking the total minimum contribution level to 8%. The Government plan to introduce a new simple low-cost pension scheme to ensure that all employers have access to a suitable pension arrangement in order to carry out their new duties. The Government estimates that these reforms will result in between six and nine million people newly participating or saving more in workplace pensions.

This year will see an election and possibly a change in government. Given that, according to the Government, adding an additional year to working lives could increase UK Gross Domestic Product by around 2%, the value of older workers will not go unnoticed whichever party finds itself in the driving seat. What older workers will no doubt be looking for are developments which give them the choice as to how they spend their time but the involvement of the old but fit should ideally be encouraged rather than compelled.