Retirement

Most employees now have the right to decide at what age they will retire. For most jobs there is no longer a legal set retirement age. This ended in 2011.

However, an employer can still set a retirement age if it can legally prove the need, but this can be difficult to do.

Overview of retirement

Usually, an employer must not:

  • raise or prompt a discussion about when an employee might retire
  • ask an employee questions such as 'when are you planning to retire?' or
  • suggest they retire, put pressure on them to retire or force them to retire.

However, if an employee raises with their employer or manager that they have been thinking about possible options such as full or partial retirement, without being asked or prompted, then that is a different matter. The employer and/or manager can then start to discuss the matter with the employee.

The employer must not respond with discriminatory remarks or actions.

An employer must not:

  • treat an employee detrimentally because they are thinking about retiring or could already take their work pension or State pension.
  • suggest the employee should retire before or during a dismissal process
  • make the mistake of thinking it has the right to change an employee's employment contract once they take any pension.

An employee does not need to retire when they reach their State pension age.

When can an employer set a retirement age?

An employer can only set a retirement age for a job if it can meet certain legal requirements. This means proving the retirement age is what the law calls 'a proportionate means of achieving a legitimate aim'. To find out more, see Acas guide: pdf icon Age discrimination key points for the workplace [510kb].

The retirement age must meet:

  • the organisation's business need, and
  • the wider needs of society in some way - for example, this might be by giving young people the chance of employment or creating a workforce with a mix of age groups.

The need to set a retirement age can be very difficult to prove and few employers do this.

When can an employee take their pension?

Employees in most jobs can choose when to retire.

When they can claim a pension is a different matter. Employees can claim a pension only when the pension scheme allows it. Pension schemes need to follow Equality Act 2010 rules.

Talking to an employee about the future

An employer can ask an employee, no matter what their age, about their work plans in the short-, medium- and long-terms, and how they view their contribution to the organisation. It's best to do this during employees' appraisals.

These discussions:

  • present an opportunity for the employer to outline its general plan for the future of the business and workforce
  • may help employer and employee identify the employee's future work preferences
  • must not include any discriminatory remarks or actions.

In the discussion, the employer:

  • must not set out to ask an employee a different set of questions because of their age
  • must not prompt a discussion with an older employee about when they might retire, or suggest they go part-time or switch to another role because of their age
  • can, though, talk to the employee about retirement if the employee introduces the subject and wants to explore it. The employee must volunteer the information without being asked or prompted. For example, the employee might say they have been thinking about taking full or partial retirement.
  • should make a note of outcomes and hold these for as long as there is a business need. The employer should give a copy to the employee.

When an employee changes their mind about retirement

If an employee decides they are going to retire, but has not given their employer formal notice of when, they can change their mind. In this situation, the employer should talk with the employee about the reason for their change of mind and whether there is any issue it might be able to help them overcome. This might be so they can retire on the planned date or shortly after. Or, for example, the employee might now have decided they want to carry on working.

In most jobs, the employer cannot force an employee to retire if they don't want to.

However, if an employee has given their employer formal notice of their intention to retire on a certain date, the employer does not have to let them withdraw their notice.

Age discrimination

Generally, employees and job applicants are protected against discrimination because of age.

This includes protection against unfair treatment because the employees or job applicant is:

  • a different age or in a different age group to another job applicant or employee, or
  • thought to be a particular age, or
  • associated with someone belonging to a particular age group.

For instance, an employer must not treat an employee unfairly because they have asked about retirement.

To find out more, go to Age discrimination.