Retirement age backed by European court

European judges have ruled that Britain's compulsory retirement age can remain in place.

The verdict from Luxembourg judges will be a disappointment for Age Concern, which launched a legal case to end compulsory retirement at 65.

But the European Court of Justice said that the enforced age of retirement must have a "legitimate aim" that ties in with social or employment policy.

Age Concern will now look to the High Court in the UK for the final decision on retirement ages.

While European judges accepted that EU law does ban age discrimination in the workplace, it also states under the Equal Treatment Directive that it is not discrimination "if they are objectively and reasonably justified by legitimate aims, such as those related to employment policy, the labour market or vocational training".

Despite the verdict, Age Concern said the government's position on retirement age continues to be "contrary".

A spokesman said: "On the one hand it wants people to work for longer, on the other it's happy to keep this legislation that reinforces a 'grey ceiling'."

The charity also launched a campaign against compulsory retirement at 65, pointing out that one in eight MPs would be out of a job if it applied to them.

Age Concern said that Commons politicians including shadow business secretary Kenneth Clarke, 68, and housing minister Margaret Beckett, 66, would be among 89 MPs who no longer had a legal right to work.

And applying the 'default retirement age' to politicians would ensure that the majority of MPs would be out of work within 10 years, as the current average age for Commons MPs is 55.

Gordon Lishman, director general of Age Concern, called on ministers to address the "double standards".

He said: "While the government clearly recognises the benefits of utilising older workers and has scrapped mandatory retirement ages for civil servants, it has failed to apply the same rules to other workers who are forcibly retired, regardless of their talents and abilities, purely on the basis of age."

George Magnus, a senior economic adviser to UBS, told the BBC that future demographic changes could lead to a change in the rules.

"Bearing in mind the speed with which our society is aging, particularly the enormous increase of people over 60 and over 65 over the next 25 years, I just don't think it makes any sense anymore to have this kind of condition, where people may want to work or have to given current circumstances under the recession, but can actually be turned down," he said.

But he also noted that the current situation for older workers is about more than just prejudice.

"I think it is about price and prejudice, if you see what I mean," Magnus said.

"The price is basically about the cost of older workers. Clearly, they are more expensive if they are more skilled and have lifetime experience.

"There is age discrimination legislation, but it only goes part of the way to solving the problem.

"If you just have the legislation, what you end up with is a lot of older people who are unemployed and want work but can't get work."

Lishman, meanwhile, called for a "cultural change" in the workplace.

"It will become a fact of life that we have to employ older people for longer," he said.

He admitted that 18 to 24-year-olds were feeling the "brunt" of the recession at the moment, but insisted that the government should take a long-term view, adding that the country will run out of young workers.

John Cridland, deputy director general of the CBI, said that the current system was not unfair on those who still wanted to work.

"I think it makes a lot of sense," he told the BBC. "Nobody argues against a school leaving age."

He admitted that changes in the workplace are taking place very fast.

"People are not going to be retiring as early and people will want to continue working," he said. "And the law should facilitate that.

"But the right to request staying on after retirement age has been hugely successful. Employers do need to be able to plan for succession and there is the odd difficult legal case that frankly we don't want fought out in employment tribunals."

He argued that there is no need "to change the law to change culture", insisting that in any event "I don't think legislation drives cultural change".