Small business groups unhappy with retirement proposals

Not all small businesses agree with Government plans to remove the default retirement age (DRA).

Plans to increase the state pension age from 65 to 66 and the phasing out of the DRA from April 2011 were among George Osborne’s Budget announcements.

Reactions to these proposals were very mixed among the various small business groups.

On the other hand, deputy director-general of the Confederation of British Industry (CBI), John Cridland supports the plan to increase DRA but considers removing it will cause problems for employers because since they benefit from having a clear framework for the timing of retirement.

The British Chambers of Commerce (BCC) said it has been concluded that the DRA is too low at present. Dr Adam Marshall of the BCC said:

“If ministers want to make a positive change, they should either raise the DRA in line with the state pension age or offer employers a new dismissal route that helps businesses manage their workforce regardless of age.”

On a positive note, chief executive of the Chartered Management Institute, Ruth Spellman said that a default retirement age takes away the freedom that should be a working right. She believes that forcing people to retire because of the age on their birth certificate is “ridiculous”.

She continued to explain that the DRA will be a risk for businesses as they might lose talented and experienced workers, categorically, because of their age.

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