According to a report in the Times this morning, Harriet Harman, the Equalities Minister, is looking into the possibility of reforming retirement rights. In fact the decision not to put over-65s “out to pasture” has already been taken in the US, Australia and New Zealand where age discrimination legislation has been used to abolish mandatory retirement.

It seems that more and more people want to work longer. For some it might be a case of necessity as they have poor pension provision, but for many others it may be because they want to keep active, both mentally and physically. There is even evidence that working longer may help to stave off dementia. (Obviously this does not apply to teachers who are completely worn out by the age of 50, and who in fact may be showing signs of dementia by choosing to work on past the earliest possible retirement age.)

In an interview with the Daily Mail, Harriet Harman said: “People are remaining active and healthy well into their older years. But there is no legal backing for you at the moment if you want to stay at work, so what we are proposing is a massive public policy change. The retirement age is arbitrary. It bears no relation to people’s ability. Think of people running their own business: they don’t shut up shop suddenly when they reach the age of 65.”

It seems that many of us are dreaming of extending our working life.

In 2003 the Department of Trade and Industry’s employment relations research programme published an analysis of the available research on retirement age. In this, they found that in terms of productivity there was no deterioration in the performance of most types of work up to the age of 70. There is insufficient evidence at the moment to determine whether productivity would fall after this age. Obviously, older people are not so productive in areas of work where strength and stamina are important, but older people have generally already moved out of such work by the time they are 65 and are undertaking work where strength is not so important.

The report also said that the macroeconomic evidence suggests that restricting a mandatory retirement age has a “small but positive” effect. Thus the increasing employment of older workers is likely to increase output and living standards and also “serves to improve the government’s fiscal position.”  Perhaps this latter point is why the government is suddenly showing interest. However, if more people work to a more advanced age this may have a bad effect on youth employment, unless the labour market grows at a sufficient pace.