Civil Service: Retirement Age (Hansard, 1 November 2004)

§ Lord Bassam of Brighton

In line with all employers in the public and private sector, the Government believe that the Civil Service should be allowed to determine retirement age policy with regard to its business needs while giving staff as much choice as possible about when they retire. Departments and agencies are free to set the normal retirement age for their own staff subject only to the requirement that the minimum age at which civil servants can retire with an unreduced pension is currently 60.

Against this background, 80 per cent of the Civil Service now has the option to remain in work until 65, and a further 11 per cent has the option to remain in work on short service concessions. Those departments and agencies which have decided that there is a strong case for retaining a retirement age of 60 in the current circumstances will be expected to continue to reexamine the issue and look positively at offering more flexibility to older staff.

The normal retirement age for the senior Civil Service is 60. However, heads of departments and agency chief executives have the flexibility to retain members of the senior Civil Service beyond 60 if they judge it to be in the public interest and are satisfied about the fitness and efficiency of the individual to carry out his or her duties.

Once the Department of Trade and Industry announces the consequences for retirement age in the UK of implementing the EU Directive on Equal Treatment, the Civil Service will need to review its arrangements to ensure compliance with any revision to the legal framework.

While retirement age and pension age are not necessarily the same, they are linked. The Government's Green Paper, Simplicity, security and choice: working and saving far retirement (Cm 5677), issued in December 2002, proposed that the rules of public service pension schemes should be changed to make an unreduced pension payable from age 65 rather than 60. Our intention to proceed with the proposal through reviews of public service schemes in consultation with employers and employee representatives was confirmed in our action plan, Action on occupational pensions (Cm 5835), issued in June 2003.

Notices were issued to all civil servants to inform them of the Government's intentions. These said that a pension age of 65 would apply to new entrants to the Civil Service by the end of 2006, and gave commitments that those existing staff aged over 50 at the time of the announcements would be only minimally affected.

More detailed proposals for the implementation of the increase in pension age are being worked up, and we expect further information to be provided to existing staff later this year.