April showers in good news for the 60+

April 2011 is a significant month for those retiring. The default retirement age of 65 is effectively abolished and for many employers this will have a significant impact on performance culture and workforce/succession planning. The changes give employees the right to choose when and whether they wish to leave work and removes the nonsense of being effective and capable at aged 64 and 364 days and then suddenly pensioned off the following day. Hopefully businesses will benefit from the continuing experience and skills that older workers can bring to the workplace if they continue to be capable and effective.

In addition, from 6th April it will no longer be necessary to purchase an annuity at 75. More flexible "income drawdown" rules will allow greater control over an individual's pension fund during lifetime and on death. This again is a much needed improvment to the current position.

And finally, the Government has announced plans to increase the state pension to £150 per week. How this is to be funded has yet to be announced but it does seem another move in the right direction, again helping people to secure a better financial future in their later years.

2011: ageing population finally on the agenda

Today the Governments confirms that it is abolishing the default retirement age of 65 effectively from April this year. This means that older workers have more control over their later years although many will still want to retire when their pension, if they are lucky enough to have one, becomes available. The Government seems to have ignored the pressure from employers and the CBI to delay their plans, largely due to the high costs involved of leaving things as they are. A key issue for all of us is that we can no longer afford to be economically inactive in our 60s when we have another 20-30 years more life in us.

In addition,this year the Government will be making progress on its plans to raise the state pensions age to 66 and the review of public sector pensions will also be published, as will a report on long term care.

2011 is hopefully going to be the year where real progress is made in tackling the very real challenges presented by an older population and hopefully will also present key opportunities for us all as we age.

MORE older workers HAVING to work into their retirement

Figures published recently by the Department of Communities and Local Government show that almost 250,000 people aged 65+ are still repaying their mortgages and that there are c1 million homeowners yet to clear their mortgage debts who are approaching retirement. Within 5 years the number of pensioners with mortgages is projected to increase to 1 million. This suggests that more and more older workers are likely to need to continue to work rather than retire. The removal of the deferred retirement age next year will at least make it easier for them to do so. These figures add further weight to the argument that employers should ensure that they have effective employment practices in place, particularly the need to update the skills of their older workers who may be employed for longer.