Under Government plans, companies will no longer be able to retire someone at 65 from next April. Ministers hope the measure will encourage people to work longer to tackle the UK's pensions shortfall.

But ahead of the Department for Business's response to its consultation on the default retirement age, which could be published as early as this week, business groups are warning they are not prepared for such a significant law change. Both the EEF and the CBI claim the Government has ignored business concerns over ditching the retirement age, including the fear that if a manager asks an employee when they plan to retire it could lead to accusations of ageism.

The changes will create a "legislative void" that would result in some managers inadvertently falling foul of the law and ending up at an age discrimination tribunal, according to the CBI, which last week called for the changes to be delayed until April 2012.

The EEF has now gone one step further by calling for the removal of the retirement age to be put off for "at least" a year, to allow enough time to introduce a replacement law that would protect retirement conversations from litigation.

Steve Radley, the EEF's director of policy, said: "If the Government pushes ahead with plans to remove the default retirement age from April it will give employers no time to prepare for the practical impact on their business of such an important change to employment legislation. It is bound to create considerable legal problems and uncertainty and the proposed legislation should not take effect until the following year at the earliest."

The changes could also lead to companies hiring less young people. Mr Radley said: "On the one hand employers are being asked to solve youth unemployment by taking on greater numbers of young people but, on the other, by allowing people to work longer they are limiting the opportunities to make this happen." 

Article from The Telegraph