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Wilson Wong

The vanishing DRA

Authors: Wilson Wong Wilson Wong

29 July 2010

By phasing out the Default Retirement Age (DRA) of 65 the UK is merely addressing the inevitable adjustments to the future experience of work.

The demographic realities in many developed countries of an ageing society and the reduced numbers joining the working age population make the principle for working longer unarguable. Europe’s working age population is projected to decline by nearly 50 million in the next 20 years while in the UK the average population growth in the next two decades is of 0.7%.

It is prudent to address the impact of longevity and falling birth rates before it becomes a crisis For instance, the intergenerational model and final salary schemes assume larger numbers of workers supporting the preceding generation. This is clearly unsustainable. The lucrative early retirements of the 1970s and 1980s were perhaps an aberration. We shall all have to shift our expectations of what we can expect from our working lives.

The benefits of the government’s proposal are that workers can choose to work longer if they are able and willing. Studies indicate clear psychological benefits to those in work.

However, this assumes that society in general and employers in particular pay attention to the well-being of their employees throughout their working lives. According to Professor Marmot’s report, Fair Society, '…more than three-quarters of the population do not have disability-free life expectancy as far as the age of 68’. That suggests that for the benefits of abolishing DRA to be realised, the role of ill health and its influencing factors must be incorporated. The initiative must be backed up with schemes like those of Sweden’s ‘Workability’ to ensure that workers’ health, skills and experience match the demands of their jobs.

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