What Do Employers Need to Do When an Employee Wants to Retire?
- Robinson Grace HR
- Sep 17
- 6 min read
Retirement is one of those big life milestones that carries weight for everyone involved, and the process isn’t always clear-cut. Employees often feel unsure about what they need to do or when to formally start the conversation. Employers, too, can find themselves uncertain about the right steps, the legal obligations, and the best way to balance professionalism with empathy. This lack of clarity can lead to hesitation on both sides, making a naturally significant transition more stressful than it needs to be.
Let’s untangle the process and explore key considerations for both employees and employers when a team member is preparing to retire.
The Law on Retirement Age
Back in 2011, the law changed and fixed retirement ages were scrapped. That means for most jobs, employees can now choose when they’d like to retire rather than being required to leave at a certain age. There are a few exceptions, such as the police, armed forces and fire service, where set retirement ages still apply.
What this really means in practice is that reaching state pension age doesn’t automatically trigger retirement anymore. An employee may be eligible for a workplace pension at a certain point, depending on the rules of the scheme, but the decision about when to retire is usually theirs as long as they’re fit and able to carry on in their role.
Age discrimination protects employees from unfair treatment if they remain in the workplace, opting not to retire at pensionable age, or because they’ve been open about considering retirement, e.g. denying training opportunities or promotion, or delaying redundancies based on the assumption that they’ll soon be leaving.
Provide suitable equality and diversity training
Anyone who may be involved in addressing conversations around retirement should be suitably trained in equality, diversity and inclusion. This will help to minimise the risk of employees feeling pressured into a retirement decision sooner than they are ready.
Before an Employee’s Retirement
Employees are advised to seek financial advice when they are considering retirement to understand their financial position and plan their retirement finances.
3-4 months before reaching state retirement age in the UK, the employee should receive a letter from the Pension Service advising them on how to claim their state pension. If they don't, they should contact the pension service to discuss their plans (e.g. whether they plan to continue working and don't want to draw it yet, plan to continue working but do want to draw their state pension at the same time, or plan to retire from employment completely).
Employees should check the Government’s website for information about eligibility for state pension, how to claim it, and payment timescales aligned to their National Insurance number.
Holding a Conversation about Retirement with Employees
Employees are protected from age discrimination by the Equality Act 2010, so employers need to be careful about how any discussion about potential retirement is handled. Asking someone directly when they plan to retire can be seen as asserting undue pressure and may even be considered discriminatory.
Instead, it’s better to keep the focus on regular conversations with all employees, not just those nearing retirement, about future plans. These discussions might touch on where someone sees themselves in a year or two, or what skills they’d like to develop. Approached this way, the conversation can naturally lead to retirement plans if the employee wants to bring it up, while also supporting their growth and helping the business plan ahead.
Phased retirement
Phased retirement is about making the move from full-time work to retirement more gradual and can be handled through a flexible working request. Instead of stopping work altogether, employees might reduce their hours, switch to part-time, or take on a lighter workload, sometimes while starting to draw pension benefits.
Offering this kind of flexibility can show employees that the organisation is supportive of their choices.
Many workplace pension schemes will make provision for partial drawdowns to facilitate the transition into full retirement. It is also possible to delay claiming the state pension through discussion with The Pension Service. The range of phased retirement options can vary depending on the nature of the employee’s role and any workplace pension scheme in place, so it is important that employees are signposted to the right information so that they can make informed decisions around their retirement.
Giving Notice of Retirement
If an employee mentions they’re thinking about retiring but hasn’t given formal notice, they’re free to change their mind. But once they put it in writing and officially give notice with a retirement date, the usual resignation rescindment rules apply, with the employer not obliged to let them withdraw it.
When the time comes to retire, employees need to follow the usual process by giving at least their contractual notice. This should always be done in writing, clearly stating their intention to retire and the date they plan to leave.
Formalities After Receiving an Employee’s Notice of Retirement
Once an employee has given formal written notice of their intent to retire, the organisation should write to the employee to acknowledge their formal notice and confirm what their last date of employment will be.
Once the employee’s retirement date has been agreed, the organisation should write to the employee to confirm details about their workplace pension scheme if applicable, remaining holiday entitlement, offer the opportunity for further discussions about any questions they may have, and arrangements for handover, returning organisation equipment etc.
During the employee’s final few weeks of work, the organisation will need to calculate their final payment, including:
any outstanding pay, including overtime
pay in lieu of any untaken holiday
bonus payments, if earned
expectation during the period of notice (or agreed pay in lieu of notice if agreed)
entitlements due under employee share or share option schemes (particularly in cases of early retirement)
deductions for income tax and relevant National Insurance contributions
deductions for season ticket loans / any other outstanding loans / amounts to be paid under car leasing agreements if applicable
Arrangements may also have to be made to ensure a smooth handover of the role and responsibilities.
Celebrating an Employee’s Retirement
Retiring from employment is a huge lifestyle change, and employees can feel mixed emotions as their final day approaches. Being able to celebrate their retirement with colleagues can make the process a positive experience and help them feel that their contribution to the organisation has been valued and recognised. Appropriate celebrations will vary between workplaces but try not to let the employee’s last day and departure from your organisation go unnoticed!
If you would like further advice on how to handle an employee’s retirement from your organisation, we can help! Simply pick up the phone to discuss what you might need 01793 311937 or email us via clientservices@robinsongracehr.com.
Frequently Asked Questions:
1. At what age can someone retire in the UK, and can employers make them retire?
Answer: In the UK, there’s no set retirement age, since the "default retirement age" was abolished in 2011. This means most employees can choose when they'd like to retire rather than being forced to leave at 65 or any other age. Employers also cannot force someone to retire, unless there's a genuinely justified requirement—such as specific safety concerns or legal restrictions in roles like the police or fire service.
2. Can I still work and draw my State Pension at the same time?
Answer: Absolutely. Reaching State Pension age doesn’t mean you have to stop working or can’t draw your pension. You can continue to work while claiming, or you could delay (defer) drawing your State Pension, which typically increases the amount you'll receive later. This setup gives employees extra flexibility when planning how and when to retire.
3. What retirement discussions are allowed—and how should employers introduce them?
Answer: Conversations about retirement need to be handled with care. Employees are protected from age discrimination, so employers must avoid asking directly “When are you retiring?” which could come across as pressure or even unlawful. The safer, friendlier approach is to regularly discuss future goals with all employees, for example in appraisals—focus on questions like “Where would you like to be in a year or two?” That way, retirement can come up naturally if the employee wants to talk about it.
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The content of our blogs is intended for general information and not to replace legal or other professional advice.
UK retirement age, default retirement age abolished, State Pension deferred, working past State Pension age, age discrimination retirement conversation, What Do Employers Need to Do When an Employee Wants to Retire
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