Erikka Askeland: Boom times are coming to an end for the baby boomers

AT THE dawn of the new year, the first baby boomer born in 1946 turned 65, signalling the beginning of a massive demographic shift from gainful employment to state liability.

This is why in the UK this week we saw the biggest change in employment law for a generation - the scrapping of the default retirement age (DRA).

From April 2011, no longer will employees be automatically handed their walking papers and a carriage clock on the day they turn 65.

The change marks a headache for employers who will have to rethink their "workforce planning". Response by employer organisations to the change is understandably mixed - because for every valued employee who contributes their wealth of experience to the company's bottom line, there is an old codger past their prime who is now harder to get rid of.

Jacqueline McCluskey, an employment partner in law firm HBJ Gateley Wareing, says you can still sack the old duffer, but now the exit will have to be driven by faltering performance rather than a more automatic and, perhaps for some, less painful procedure.

Appraisals, she points out, will be crucial. And rather than setting off into a cosy retirement with a soft-focus nostalgia for a career well spent, more older workers will see the end of their working lives marked by rejection.

This emphasis on performance is also set to widen the evaluation process. If 65 is no longer the magic number, then it is possible to assume that employers will start cracking down and reviewing all employees in their 60s or even 50s.

But as Miriam O'Reilly, 53, who won her case for age discrimination against the BBC this week, proves, the elderly are not without teeth. Which is another worry for employers. HBJ also notes that age complaints in tribunals have already increased by 37 per cent on 2009. Expect more of these as the DRA comes to an end - and be prepared, says McCluskey.

What baby boomers won't get, because we can no longer afford them, is the certainties handed to the generation before - those born before the war ended. These were the cohort that has been enjoying such unaffordable and soon to be antique benefits as final-salary pensions.

Those born in the UK between 1947 and 1965 face a different retirement, with working beyond 65 only the beginning. Although they too got the benefits established by and for their elders - free university tuition and dirt cheap houses whose values have skyrocketed - increasingly this group has lost out.

Many have already said goodbye to their final-salary pension and face taking state benefits - when they finally qualify for them - that are among the lowest in the developed world.The upside that the UK's baby boomers will live longer, healthier lives than their parents is the downside too - as the likelihood the NHS will be able to bear the strain of their increased cost of care is increasingly uncertain.

But worries that a battalion of elderly people will choke up the jobs market for rising young whippersnappers are misguided. Instead, lifting the age of retirement removes a potentially catastrophic burden on the smaller, leaner shoulders of the younger generation whose National Insurance payments currently fund state pensions and the NHS.

The prospect of more working people over the age of 65 eases this, and means their contribution, rather than cost, to the economy will create more jobs to go around.

But the jury is still out as to whether raising the retirement age is fair. For every baby boomer that feels bereft without gainful employment, there is another who can't wait to shirk the nine to five duties and spend their pension on time share holidays and sangrias.

When we get to the other side by 2030, and all the baby boomers are 65 and older, we are likely to have a completely different view of what retirement means.