The government will reassess enforced retirement over the coming months

It said scrapping the rule would remove the “safety net” for employers and encourage more approaches to issues such as flexibility, handling the performance of workers of all ages, and improving occupational health.

The commission suggested that the economy “would be a big winner” from the proposed changes, with research from the National Institute of Economic and Social Research suggesting that extending working lives by 18 months would earn Britain £15bn.

The commission’s deputy chair, Baronet Margaret Prosser, said it was time to move away from systems put in place when people died not long after reaching state pension age.

“Britain has experienced a skills exodus during the recession, and as the economy recovers we face a threat of not having enough workers – a problem that is further exacerbated by the skills lost by many older workers being forced to retire at 65,” she said.

“Keeping older Britons in the workforce benefits the economy more broadly by decreasing welfare costs and increasing the spending power of older Britons.”