Business and pressure groups have welcomed a Government announcement to phase out the so-called default retirement age (DRA) of 65 by October 2011 in a move to encourage people to work for longer.

Currently employers can make staff retire at 65 regardless of their circumstances but ministers signalled this was set to change as people were living longer, healthier lives.

The Government said it was one of a number of measures it was taking to help and encourage people to work for longer against the backdrop of demographic change.

Other steps include reviewing when the state pension age should increase to 66 and re-establishing the link between earnings and the basic state pension.

The Business Department said the consultation, which will run to October, also proposed to help employers by removing the administrative burden of statutory retirement procedures.

“With the DRA removed there is no reason to keep employees’ right to request working beyond retirement or for employers to give them a minimum of six months notice of retirement.

“Although the Government is proposing to remove the DRA, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it. Examples could include air traffic controllers and police officers,” said the department.

The Chartered Institute of Personnel and Development (CIPD) welcomed the announcement, adding that following many years of campaigning to remove the DRA it was “delighted” with the “breakthrough”.