Budget 2010: Govt could scrap compulsory retirement age

The Government is looking into scrapping the compulsory retirement age, Alistair Darling says.

In what he termed as a "Budget for recovery", Darling said he was looking to improve rights for older workers and was looking into scrapping the compulsory retirement age.

Hargreaves Lansdown head of pensions research Tom McPhail said the government was talking about scrapping compulsory retirement age, without actually confirming the outcome of the ongoing review on the subject.

The government announced it would bring forward a review on investigating if a default retirement age was still relevant in today's society after the High Court ruled it was legal for employers to force workers to retire at the age of 65.

The ruling was the result of a test case - brought by Age Concern and Help the Aged - on the legality of the default retirement age in July.

Mr Justice Blake decided that the Default Retirement Age introduced by the government in 2006 did comply with an EC Directive against age discrimination.

He indicated that an exempt retirement age at 65 was lawful back in 2006 when it was introduced, due to the prevailing circumstances and evidence available at the time.

However, he did say that there was a "compelling case" for a change in the law - and noted the law would not be likely to be lawful if it were introduced now because of the current economic conditions.