Retirement age hike 'will result in employment disputes' That has led to conflicts with employers who want to keep their workforce numbers down, with a rise in age discrimination disputes. "Hiking the state pension age to 70 means employees today will believe they are allowed to retire later in life, causing problems for businesses that are trying to manage their workforce," said Emma Burns, head of employment at Hugh James, the law firm. The removal of the default retirement age means that it is much harder for businesses to force older employees to retire. This change means fewer employees will want to retire voluntarily before they are 70, creating a headache for their employer. Older employees tend to expect to be able to take advantage of flexible working as they near their planned retirement, for example just working one or two days a week. This is going to be a big problem for employers if a large swathe of their workforce expect to retire later while benefiting from an abnormally short working week. Mr Osborne on Thursday revealed he was scrapping employer national insurance contributions for firms that hire under-21s, making it £1,000-a-year cheaper to hire someone earning £16,000. The move will cut youth unemployment, he hopes. But the Institute for Fiscal Studies yesterday warned this would lead to employers hiring fewer people in their early 20s.