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Victor Keegan
 Dec 14, 06 - 10:27 AM |
Compulsory retirement at 65 is a nonsense.
Senior momentum Compulsory retirement at 65 is a nonsense. It compounds the pensions crisis - but worse, it's a waste of valuable skills and experience. Victor Keegan The argument about compulsory retirement at 65 - the subject of a high court challenge this week - will look pretty silly in years to come, once it becomes a distant memory. It is partly because 65 is such a stupidly arbitrary age to retire when people are living much longer compared with the time when the rules were first laid down. If the equivalent of "inflation adjusting" to reflect increased longevity had been applied each year, the retirement age would by now be well into the seventies. Older people have skills and dedication sometimes lacking in the younger generation, which could be a vital ingredient of future economic growth. Although there may undoubtedly be problems - in particular, companies of older people "crowding out" youngsters - this does not apply across the economy as a whole. The idea that there is only a certain number of jobs to go round (known by economists as the lump of labour fallacy) is a nonsense. At the moment, Britain is short of employees as the huge number of migrant workers indicates. If a greater number of older people were working, they would also spend more of their increased incomes, thereby giving a boost to the economy. It is also quite possible they would tend to spend more on basic goods made in Britain rather than expensive luxury imports. No one should be compelled to work longer than they want to but, if they do, they will help not only themselves but the Exchequer as well, since they won't draw their pensions until later - so helping to resolve the looming funding crisis. There will be problems with some companies, particularly smaller ones. If they knew that anyone they hired could be there for ever, then it could prove to be a disincentive for starting up in the first place. However, this problem has to be sorted out with people under 65 in any case, and should not prove insuperable. The more we view older workers as strategic assets - rather than financial liabilities - the quicker the supposed economic problems will evaporate. |
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