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Business urges delay in retirement changes

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Business experts have urged the government to delay changes to the retirement age, warning that it would create “huge uncertainty”.

The CBI has said plans to scrap the default retirement age (DRA) from April 2011 would lead to legal confusion and “unintended consequences”. Experts also said there could be a greater risk of tribunal claims as people navigate the new system.

From next year employers will no longer be able to dismiss staff when they reach the age of 65.

The CBI has called for the plans to be delayed for 12 months and the law on unfair dismissal to be simplified. The organisation has also said the state pension age should be a “milestone” after which employers no longer have to offer occupational benefits.

John Cridland, left, the CBI’s director-general designate, said: “The ageing population and the shortfall in pension savings make it inevitable that people will want to continue working for longer. Employers understand this, and businesses value the skills, experience and loyalty that older workers bring.

“However, in certain jobs, especially physically-demanding ones, working beyond 65 is not going to be possible for everyone. The DRA has helped staff think about when it is right to retire, and has also enabled employers to plan more confidently for the future.

“With the scrapping of the DRA in April, a legislative void is opening up. We need to modernise our employment law framework to ensure that it is fit for purpose.

“In the majority of cases this will not be an issue, but in a minority it will be a serious problem for all concerned.

“The government needs to act fast, and there should be no changes to the retirement framework until these issues are resolved.”

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