As of 29th June 2026, the Employment (Contractual Retirement Ages) Act 2025 has now come into effect.
What is the Employment (Contractual Retirement Ages) Act 2025?
The Employment (Contractual Retirement Ages) Act 2025 will facilitate employees who wish to remain in employment until the State Pension Age (66), even if the retirement age set out in their employment contract is below this threshold.
The Act is not intended to compel employees to remain in the workforce for longer. Instead, it is aimed at facilitating those employees who do wish to work until the State Pension Age. For employees who are happy to retire at their company’s contractual retirement age, this legislation will not impact them.
How will the Employment (Contractual Retirement Ages) Act 2025 impact employees?
If an employee does wish to work until they are 66, beyond their company’s contractual retirement age, they will be able to notify their employer in writing that they do not consent to retiring at that age.
This must be done at least three months, and less than one year, before the employee’s contractual retirement age.
Under the Act, the employee will also be protected from penalisation arising from their decision to work past the contractual retirement age. For example, employers will be prohibited from suspending, dismissing, or demoting the employee because of their decision to exercise this employment right.
How will the Act impact business owners?
Once an employee has notified their employer that they wish to work beyond the contractual retirement age, the employer must review and consider the request. They can choose to decline, but they must respond in writing within one month and provide a reasonable justification for their decision.
Businesses will now need to adjust their HR policies and documentation to comply with the new legislation. Employment contracts and retirement policies should be reviewed and adapted, and any changes made will need to be communicated clearly to staff.
