The government has announced it’s to abolish the default retirement age at 65. What will that mean for older employees?
Many people want to work beyond the age of 65, but under the current rules employers don’t have to let them. That’s planned to change in October 2011.
The government plans to make it illegal for companies to force someone to retire at 65. The default retirement age was introduced in 2006 to stop companies from forcing out workers before 65, but it doesn’t help those who want to work beyond that age. The government announced its plans to abolish the default retirement age in the emergency Budget in June and said the new rules would apply from next April. Now it says that the rules will be phased in over a six-month period.
The government is going to abolish the need to buy an annuity at the age of 75 and is consulting on how to go about it.
The government says that from next April, you won’t have to buy an annuity by the age of 75 with your pension. The question is, what will we have to do instead?
If you were to do a straw poll of what people find unfair about the current pensions system, the fact that most people have to buy an annuity by the age of 75 is bound to be on the list somewhere. Well, that all changed in the emergency Budget when the government announced that it would abolish the need to buy an annuity by the age of 75 from next April. The consultation announced yesterday is designed to look at what should replace it – whether people should be free to dip into their pension pot or whether there should be some restrictions.
If you’re coming up to retirement, there are several steps you should take in the years before you stop work.
If you’re a few years away from retirement you may be focusing on the day you stop working (or at least, cut down on the amount of work you do). But there are important decisions that you'll have to make about your money before you can ditch the daily commute. Get those right and you could end up with more money every year for the rest of your life. Get them wrong or fail to plan and you could have to make cutbacks at a time when you should be enjoying a well deserved break.
