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Retirement Leave Policy: How Flexible Working Rules Could Offer a Richer Later Life

Retirement Leave Policy: How Flexible Working Rules Could Offer a Richer Later Life

Pensions expert Dr Ros Altmann, the Government’s new the Government’s new Business Champion for Older Workers, has suggested that new flexible working rules could be adopted by workers in their fifties and sixties to initiate a form of “retirement leave” that would enable them to take sabbaticals before coming back “refreshed”.

Employees now have the legal right to request flexible working, after the government introduced new legislation in June this year. Businesses have three months to respond to each request; although they are not obligated to accept them, they must offer an appeal if the application is rejected.

Financial adviser Hargreaves Lansdown forecasts that the number of over-65s in the workforce could grow to 3m by 2037, thanks to population growth, a rise in the state pension age, and increased life expectancy, meaning that employees working into their 70s will soon be the norm. The government has concluded that “there is clearly significant potential for more older people to participate in the labour market for longer”.

Tom McPhail, head of pensions research at Hargreaves, talks about the desirability of making life-long learning available to all, in order to increase the employability of older workers: “The challenge for the Government is to make it easier for people to retrain and to find new ways of earning a living. One option would be to look at tax breaks for employers giving training courses to the over-55s”.

Scale down the working week

Workers in their 60s could use the law to scale down their working week to suit, according to Dr Altmann. She said “I would really encourage people to use the law to ask for a period of leave, and for employers to treat the idea seriously, because it could be in their long-term interest as well. What people think of as the retirement dream is an easier life but that does not, for many people, equate to no work at all – they may not want the same pressure or workload and move to two or three days instead”.

Opportunity for a richer, later life

Dr Altmann said she hoped that employers would endorse the concept of retirement leave, adding that “if employers don’t embrace it on their own”, it could well be enshrined in law in the future.

However, Pensions Minister Steve Webb said he thought it unlikely that retirement leave as a concept would ever become a legal right. He noted that “Three out of five requests across all ages for flexible working are granted straight away and four out of five after a short time, so I don’t think this is something the government needs to prescribe”. He added “it works better as a “do-it-yourself retirement leave”.

Dr Altmann reiterated that the UK has “an opportunity to invent and embrace a whole new phase of life”, and that “what we’re talking about is a richer, later life. A better, later life. An improvement in your well-being – both financial, physical and mental – if you want to keep working”.

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