For the 17 million people in the UK who are 50 or over, the ability of employers under the law to enforce retirement at 65 is a serious problem, especially given the impact of the economic crisis on the value of retirement savings. Add to this the fact that unemployment figures due this week are expected to confirm job losses are rising fastest among older workers, and we see how vulnerable this group has become. As we adjust to the consequences of the downturn, scrapping the mandatory retirement is becoming essential to their welfare.

Unfortunately, the European court of justice ruled last week that such enforced retirement at 65 was not in breach of EU legislation if it had a legitimate aim related to employment and social policy. The case will now go to the high court. The government had already

indicated that the whole issue was under review, but now it will have to go to court and explain why a mandatory retirement age is necessary. In the UK, there are already more people over 65 than there are under 16. The UK’s age structure is changing and the dependency of older citizens on people of working age is going to rise dramatically. This poses enormous strategic issues, including the supply of labour in the economy, living standards, and tax and spending policies. Society is going to need the economic and financial contributions of older citizens more than ever.

For individuals, there are self-evident advantages. They may want to work longer, because they derive fulfilment from work. They may have to because of adverse financial circumstances. For society though, longer working lives would help the adjustment process to an older world in three important ways. First, the labour force would be bigger, and so the financial burden would be smaller. In effect, the huge costs associated with ageing societies would then become self-financing. Second, older people have skills, experience, educational abilities and an earnings and savings capacity that could be deployed to the economy’s advantage.

Third, tax and social security contributions would be enhanced, and the public sector’s age-related spending would be more contained. In fact, the economics makes even more sense if

citizens draw their pensions at 65, but continue to work for another five or 10 years.

The reasons in favour of a mandatory retirement age are partly about price and partly about prejudice. Price relates to the higher cost of employing older workers, relative to younger people. Prejudice is about the allegations that older workers are less productive, less adaptable, and less able to remain at the cutting edge. These arguments are neither trivial nor without empirical backing. But this simply underscores that retirement age cannot be left to mechanistic legislation alone. We need to develop programmes designed to change the nature of work for older citizens, including lifetime learning and education, and compensation structures based around merit and ability rather than seniority. — The Guardian