Is a mandatory retirement age good for younger workers or ageist?

Lydia Smith
Updated

Following Labour’s landslide win in the UK general election, the party is set to impose a retirement age of 80 on House of Lords members. The plan, which the party hopes will create a “more representative” body, will eventually also see the remaining hereditary peers phased out.

The proposals have sparked a wider conversation about mandatory retirement in the UK, with some criticising Cambridge University’s "employer justified retirement age" (EJRA) as ageist. Currently, the university’s EJRA sets the retirement age for senior academics at 67.

However, others say it opens up crucial pathways for younger people working in academia, while ensuring new and important voices are heard, alongside older, more experienced staff members.

But is mandatory retirement legal? Will Labour’s plan encourage more businesses to introduce similar rules? And what are the pros and cons for employees and employers?

“Keir Starmer’s announcement that House of Lords peers will be forced to retire once they reach the age of 80 may set the cat amongst the pigeons for employers in the UK who were under the impression that it’s illegal to set a mandatory retirement age at work,” says Andrew Willis, associate director of legal at the HR and employment law firm Croner.

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“The reality is it’s not automatically unlawful to set a maximum age on employment which means employers can operate a retirement age,” he explains. “But there is a tricky legal test to pass first because ending someone’s employment purely because of their age would fall foul of age discrimination laws.”

Therefore, to bring in a mandatory retirement age, businesses need to have a strong reason behind needing to free up spots currently filled by older workers. They also have to ensure there is no other less discriminatory way of doing this than ending employment, or they risk getting into hot water legally.

“Another thing to remember is that any age limit can be lawful provided the test is met, there is no need for it to be over the state pension age,” Willis adds.

One of the key arguments in favour of mandatory retirement is that it could allow younger workers to move up the career ladder.

More than three-quarters of younger workers want their employers to invest more in their learning and development so they can progress, according to a recent survey.

“In certain workplaces a compulsory retirement age might help to create space on the career ladder, so in that sense it might well help younger workers,” says Willis.

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“The main pro for employers is that it may make it easier for them to provide a career pathway for their workers and to enable effective and efficient succession planning. It also helps both employer and employee avoid having to manage older workers out on capability grounds, on a case by case basis.”

Some suggest that mandatory retirement is financially beneficial for businesses, in part, because of increased productivity among younger workers. However, with very few employers actually implementing this strategy, there is little data to support this theory.

Older workers also bring a wealth of experience that younger workers can benefit from, so it’s about finding the right balance.

Some argue that imposing a retirement age is ageist, especially at a time when attitudes towards older workers have worsened in some spaces.

“Career advancement opportunities are vital for ensuring the future of the workplace, as is creating a workplace where everyone’s voices are heard and ideas are valued, regardless of age,” says Willis.

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Soma Ghosh, a career coach, adds: “It doesn't allow for flexibility to retire when someone wants to and having it be mandatory means that choice is taken away.”

Additionally, some older workers may struggle with a requirement to retire at a certain age. More people are choosing to work past retirement age, either because they don’t feel ready to stop working or because they can’t afford to not work. Nearly half of working UK adults (46%) believe that they will still be working after they reach state pension age, according to a survey of 2,000 people by the pension provider People’s Partnership.

It can also be challenging for businesses to implement a mandatory retirement age. “The main difficulty is that a compulsory retirement age is, on the face of it, discriminatory — although a claim can be successfully defended,” says Willis.

“The employer must be able to show that having a compulsory retirement age is intended to meet a legitimate aim — a real business need.”

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