Honda plans to raise retirement age to 62

Leaders of the biggest private-sector union attacked plans by Honda yesterday to "prolong the working lives" of staff at its UK plant by raising the retirement age to 62 from 60.

The Japanese car manufacturer is understood to be the first big organisation to adopt the tactic. There are fears that more businesses will try to keep employees working longer to bolster beleaguered pension funds.

Honda has tabled a proposal to raise the retirement age as part of its pay talks with Amicus, which represents skilled and white-collar workers.

Derek Simpson, joint general secretary of the union, has submitted proposals to the Government for a minimum pension contribution from employers of 10 per cent and 5 per cent from employees to guarantee a minimum retirement income for all working people.

Mr Simpson urged Honda's 4,000 workers in Swindon to reject attempts to prolong their working lives and urged ministers to introduce urgent legislation to protect pensions. The Amicus leader said he expected resistance to his plan from employers on the same basis that they opposed the introduction of the national minimum wage.

"Just as the wage policy has proved beneficial to workers and harmless to business, the level playing field of compulsion on pension contributions will have no impact on competitiveness and jobs," he said.

The union recognised that not all employers could afford to run personal pension schemes and suggested the Government set up a retirement plan backed by government bonds.

Honda wants to keep employees working longer to bolster its pension fund, which is more than £40m in the red. The company declined to comment yesterday because it was in the middle of a pay review.