By Claire West

New CIPD survey shows nearly half the UK workforce is in favour of extending working lives, endorsing Government plans to phase out the Default Retirement Age

A new CIPD survey, Employee Outlook: focus on the ageing workforce, has found that four in 10 (41%) employees plan to work beyond the state retirement age, compared to 29% of the 2,000 respondents who don’t. The survey also shows that many people are uncertain, with 25% saying they don’t know either way.

The survey, which helped inform the CIPD response to the Government consultation on its plans to phase out the Default Retirement Age (DRA) by October 2011, finds that nearly half of respondents are against the current right of employers to retire employees once they reach their 65th birthday. Almost half (44%) oppose this law, which was introduced in 2006 as part of the Age Regulations and is now incorporated in the Equality Act 2010, while just 25% support the legislation. Twenty-seven per cent do not know either way.

Older workers are significantly more likely to disagree with the DRA than younger workers, with nearly six in ten (56%) of those aged 55 and above disagreeing with the legislation, compared to 35% of 18-24 year olds.

Among those employees planning to work beyond the state retirement age, the survey found — not surprisingly given the economic climate and tough situation regarding the future of pensions — that financial reasons are cited by 72% of respondents. This top finding is closely followed by people’s needs and aspirations to continue using their skills and experience (47%), benefit from social interaction in the workplace (41%) and for self-esteem (34%).

Dianah Worman, diversity adviser, CIPD, says: “The survey results show support from UK workers for the action the Government is taking to phase out the DRA. Its removal will put employers in a strong position to access a wider pool of mature talent. It will build on the beneficial experiences of UK employers who have already abandoned compulsory retirement ages.

“There are clear business benefits to employing a workforce that is age diverse and reflects organisations’ customer profiles. Employers that already operate without a formal retirement age report that older workers typically have a great rapport with customers, as well as a conscientious attitude and real enthusiasm for the job.

”The CIPD, however, warns that employers will need to make sure their people management policies and practices are in mint condition to manage an increasingly age diverse workforce. The prevailing demographic changes, due to people living longer and healthier lives, and an average birth rate that is below replacement level, demand action. Effective and fair performance management across the whole workforce will be critical, as will inclusive and creative approaches to flexible working, to support businesses in meeting their goals. If employers drag their heels in getting to grips with an ageing population and the associated 21st century people management challenges, they will fall behind more progressive competitors in sustaining business performance.

“The CIPD anticipates that many mature employees will reach a point when they decide to stop working altogether and resign voluntarily after the DRA has been abolished. But employers will need to make sure that any dismissals they have to make are conducted fairly and that they do not behave in a way that is age discriminatory.”

The survey respondents highlight health (64%), personal performance (62%), and availability of a suitable job (31%) as the main reasons on which decisions about extending working lives should be based. Just 13% of employees don't believe employers should be able to require people to retire on the basis of any of these criteria.

More money stands out as the number one measure that would encourage people to extend their working life; with four in 10 (43%) saying this is the most important factor. Twenty-eight per cent cite flexible working as a key factor in encouraging working beyond the retirement age.