Your Settlement Agreement Solicitor

The Settlement Agreement Solicitor

Episode 14: Will My Age Affect My Settlement Sum?

Hello, and welcome back to The Settlement Agreement Solicitor Podcast! I’m your host, Geoffrey Caesar, solicitor of England and Wales with over 20 years of experience specialising in—you guessed it—settlement agreements. If you’ve been following this podcast, you know we cover everything you need to know when it comes to navigating the tricky waters of employment settlements. Whether you’re an employer or an employee, these episodes are designed to give you insights into the world of settlement agreements and employment law.

In this episode, we’re tackling a question that often arises during settlement discussions: "Will my age affect my settlement sum?" It’s a question worth exploring, especially if you’re at either end of the working-age spectrum.

So, let’s dive in.

First things first, let’s acknowledge the fact that age can indeed be a relevant factor when negotiating a settlement agreement. But how it plays out depends on several key elements, which I’ll explain.

Firstly, Age and Employment Prospects

When considering a settlement sum, one of the biggest factors employers and solicitors like myself look at is the future employment prospects of the employee in question. If you’re closer to retirement age, the argument could be made that finding another job might take longer—or may not be feasible at all, depending on your personal circumstances and the industry you’re in.

For example, if you’re 60 and working in a highly specialised field, the likelihood of walking into another job quickly may be lower. As a result, you might have a stronger case for a higher settlement sum to reflect the potential financial impact of unemployment in the lead-up to retirement.

On the flip side, if you’re in your 20s or 30s, with lots of career years ahead of you, an employer might argue that your ability to find another job will be easier and quicker, potentially leading to a lower settlement offer. This doesn’t mean your age will always reduce your settlement sum if you’re younger, but it can be a point of negotiation.

Secondly, Discrimination Claims

Now, let’s talk about age discrimination. If age is a factor in why you’re being let go, then you could have a claim for unfair dismissal based on age discrimination. And let me tell you, age discrimination claims can lead to significantly higher settlement sums.
Employers generally want to avoid litigation surrounding discrimination claims, as they can be damaging both financially and reputationally. If you’re able to demonstrate that age was a factor in your dismissal or redundancy, your settlement agreement could reflect that risk to the employer.

Thirdly, Redundancy Pay and Age

In the UK, redundancy pay is tied to your age in a very direct way. The statutory redundancy scheme actually increases the amount you’re entitled to based on your age bracket. Here’s how it works:

You’ll get:
half a week’s pay for each full year you were under 22
one week’s pay for each full year you were 22 or older, but under 41
one and half week’s pay for each full year you were 41 or older
Length of service is capped at 20 years.

That age-based calculation isn’t lost when we move into settlement agreement negotiations. Even though a settlement isn’t a statutory redundancy, the idea behind compensating someone more when they’re older, because they have potentially fewer working years ahead of them, is taken into account.

Fourthly, The Pensions Factor

Don’t forget the impact of pensions! If you’re close to retirement age, pension rights can play a significant part in the negotiations. If a dismissal or redundancy pushes you into early retirement, there could be financial penalties or reduced pension benefits that would need to be covered in the settlement. I’ve seen many cases where pension loss forms a substantial part of the settlement sum, and rightly so. If you’re losing out on years of contributions or are forced to access a pension earlier than planned, that needs to be taken into account.

Fifthly, What About Younger Employees?

For younger employees, the calculation often goes in a different direction. Employers might argue that someone in their 20s or 30s has a longer career path ahead, so any financial hit from leaving the current job can be recovered by securing new employment quickly. That said, if there are other factors at play, such as mental health concerns or personal circumstances that make securing future employment difficult, those factors must be considered.

It’s also important to mention that younger employees who are dismissed or made redundant may still have strong claims if they feel they’ve been treated unfairly or if there are breaches of employment law. For example, if you were pressured out of a role due to discriminatory practices, even if it’s not based on age, you could be entitled to a more substantial settlement.

Negotiating Your Best Outcome
So, what does all this mean for you? Well, it’s crucial to remember that settlement agreements are highly individual. Whether you’re young, middle-aged, or nearing retirement, your settlement sum will depend on your particular circumstances, the strength of your case, and how well your solicitor negotiates on your behalf.

As always, my advice is to have your settlement agreement reviewed by a solicitor who understands the nuances of employment law and can help you get the best possible outcome—whether age is a factor or not.

That’s all for today’s episode of The Settlement Agreement Solicitor Podcast. I hope this episode has shed some light on how your age might impact your settlement sum. If you’re in the process of negotiating a settlement, or if you’ve been offered one and are unsure about the next steps, feel free to reach out to me at The Settlement Agreement Solicitor.

Until next time, take care and make informed decisions. This is Geoffrey Caesar, your settlement agreement solicitor.