Croner's view on Tesco increasing pension age

By Amanda Beattie
15 May 2012

Tesco's recent decision to increase the age at which workers can claim their full pension entitlement has sparked concern from Croner customers, but what does this mean for British businesses?

With proper consultation a company can increase the age at which an employee can take advantage of their full pension entitlement. Following the abolition of the Default Retirement Age of 65 on the 6th April 2011, retirement is no longer a fair reason for dismissal.

In this case Tesco has sought to increase the age at which employee can retire and take advantage of the full pension entitlement, meaning employees will in effect have to work longer, not to impose a company default retirement age. "Since the abolition of the Default Retirement Age employees have the right to continue working for as long as they choose and they are fit and able to continue.

"This is a complex area and with the risks of discrimination claims high, employers would be wise to seek advice" says Sarah Cooper, Employment Consultant at Croner Richard Smith, HR expert at Croner speaking on Kaye Adams' Call Kaye morning show on BBC Radio Scotland said:

"I think it's very common now for employers to be raising the pension ages for their employees mainly because pension funds simply don't have the wealth they once did a few years ago. "Having said that, it's not case of employers forcing people to retire because legal changes last year [of the abolition of the Default Retirement Age] meant that employers can't insist that people retire at 65 or 67 or 60. It is for the employee to decide when they retire but of course the employer has to decide at what age they will pay pensions and the two often go together."

About the Author

Amanda Beattie

Amanda represents corporate clients and large public bodies, including complex discrimination and whistleblowing claims. Amanda also drafts and delivers bespoke training regarding all aspects of employment law, including ‘mock tribunal’ events; in addition she also frequently drafts employment law articles for various publications for Croner and their clients.