by business editor Trevor Sturgess

Plans to scrap the default retirement age of 65 have received a mixed response.

The Government has launched a consultation exercise with business and other groups with the expectation that the age rule could go by October 2011.

Currently employers can make staff retire at 65 regardless of their circumstances but this is set to change as people are living longer, healthier lives. Many also wish to work longer for financial reasons.

The consultation also proposes to help employers by removing the administrative burden of statutory retirement procedures. The Government says that removal of the DRA means 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.

Alyson Howard, business development consultant with Kent law firm Brachers welcomed the change, saying it was overdue. There was no reason to "chuck out" people who were 65 when they were perfectly capable of keen and able to make a contribution. She said her firm employed a number of people over 65 who were doing a good job.

And many older people needed to earn. "Many of us in the private sector know we will have to work considerably past 65 because of the performance of private pensions and their inadequacies," she said. There was no reason why many people should not work when they were in their 80s. There had been a lot of ageism in redundancy decisions, she claimed. "It loses masses of experience and who are the young people coming going to look up to?"

But the CBI said the decision would leave business with many unresolved problems and the Government's timetable gave firms little time to prepare.

"Scrapping the DRA will leave a vacuum, and raise a large number of complex legal and employment questions, which the Government has not yet addressed. This will create uncertainty among employers and staff, who do not know where they stand," said John Cridland, deputy director-general. “For employers, these proposals could make workforce planning and providing some employment benefits, such as critical illness cover, next to impossible.

"A default retirement age helps staff think about when it is right to retire, and also enables employers to plan more confidently for the future. In certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone."

Meanwhile, almost two thirds (62 per cent) of the South East's older generation never anticipate ceasing work completely, according to an HSBC survey. Over a third (34 per cent) of the region's 2,999,000 over 50s have taken the plunge and "career shifted" in their later working years.