Employers want staff to be allowed to work on

The Government is being urged to help employers by removing obstacles to flexible retirement for older people who want to continue working.

The Employers Forum on Age argues this week that failure to allow staff to draw part pension and part salary will lead to even greater skills shortages.

Delivering Flexible Retirement criticises the public sector’s record on retaining older staff. It calls for the Government to ensure staff understand the flexible retirement options available.

EFA chairman Howard Davies, who is chairman of the Financial Services Authority, said, “The Government has a responsibility to make flexible retirement easier by acting on recommendations outlined in its own Performance and Innovation Unit study.”

He said these included changes to both Inland Revenue and Department of Social Security rules, proposed by the report Winning the Generation Game.

Inland Revenue rules do not allow any part of a pension to be drawn before retirement, even if staff move to part-time work with their current employer.

He added, “If the Government is to encourage people to remain economically active it must act on its commitment.”

The EFA, an independent network of employers committed to attracting and retaining experienced employees, has estimated that the cost of failing to keep 50 to 64 year-olds in the workplace at some £26bn per year.

Sam Mercer, co-author of the report and EFA campaign director, called for the abolition of statutory retirement.

“In today’s knowledge economy it is crucial organisations retain the competitive advantage that older workers give them.

“Corporate culture at present undervalues the contribution and experience of 50-plus employees and promotes a climate where early exit is the norm.”

Donya Urwin, policy manager at Mark & Spencer, said the current rules meant that staff wanting to work part-time during retirement are lost to the store’s competitors. She said this was because staff were able to work for one employer and receive a pension from another.

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By Helen Rowe