UK – Compulsory retirement in the UK is expected to be shaken up with the age at which people retire inevitably increasing past 65, according to the government’s chief independent advisory body on pensions and Mercer Human Resources Consulting.

Adair Turner, chairman of the Pensions Commission, told the FT: “Either there should be no default age set at all or that, if one is set, it should be significantly higher than the current male state pension age of 65. It should be 70 or something like that.”

The default age affects when employers set a cut-off retirement date. It does not affect when the person can claim the state pension, which is expected to remain at 65 for the foreseeable future, according to the Department of Work and Pensions.

The default age is currently 65 but a European Union employment directive to be introduced in 2006 bans such age-discrimination. As a result, the government is consulting on whether there should be a new default age set, or whether one is needed at all. The Confederation of British Industry, along with the EEF, formerly the Engineering Employers’ Federation, want it kept at 65 for fear of retaining incompetent employees for longer.

Deborah Cooper, senior research actuary at Mercers, however, said the retirement age would inevitably increase as life expectancy grows and birth rates fall. “People are now living longer, healthier lives, and not everyone is ready to retire at 65. Both employers and employees could benefit from the freedom to work longer.”

By deferring retirement people could reduce their hours while receiving part of their occupational pension.