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Latest NewsFlexible workingPay & benefitsRecruitment & retentionPensions

Pensions minister urges employers to encourage gradual retirement

by Louisa Peacock 8 Apr 2008
by Louisa Peacock 8 Apr 2008

Employers must help over-55s to retire gradually rather than encourage a ‘sudden stop’ approach to work, the pensions minister has urged.

Mike O’Brien has claimed the traditional “cliff-edge” approach to retirement, which favours employees to suddenly stop working from one day to the next is outdated.

His views come on the back of an Ipsos MORI study, out today, which revealed that 10% of retirees felt anxious, sad or lost and less than half felt happy on the first day of retirement.

Under one-third of the 1,000 over-55s interviewed in the survey felt relaxed and less than 25% felt free on their first day without work.

O’Brien said: “The idea that one day you work and the next you stop can be a shock to the system. These findings challenge the traditional ‘one size fits all’ approach to retirement.

“Many of today’s older workers are rejecting the cliff-edge between work and retirement in favour of a gradual step down. And employers should help them to do this.”

About one million Brits work past the state pension age, currently 65 for men and 60 for women, and most of these have chosen to work part-time.

Charles Cotton, reward adviser at the Chartered Insitute of Personnel and Development said: “Government policy could do more to encourage more older workers to stay on by extending the right to request flexible working beyond parents and carers and making pension arrangements more flexible.”

Cotton also called for the government to remove the default retirement age of 65, rather than wait until the 2011 policy review, labelling it a “bureaucratic barrier” for HR professionals and older workers who wish to work beyond retirement age.

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Chris Ball, chief executive of The Age and Employment Network, said: “Some forward-thinking employers are giving their employees the opportunity to gradually wind down by offering flexible working options of one kind or another.

“However, the government’s own policy of introducing a default retirement age of 65 means they are responsible for many older workers being pushed over the retirement cliff-edge by their employers.”

Louisa Peacock

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