Ministers outlined watered-down proposals yesterday to tackle age discrimination at work.
The proposals form part of the European Employment Directive, prohibiting age discrimination in employment and vocational training, which the government is committed to implementing by 2006.
Trade secretary Patricia Hewitt and work secretary Alan Johnson unveiled the proposals.
They include setting a default retirement age of 65, but also creating a right for employees to request working beyond a compulsory retirement age, which employers will have a duty to consider.
Ministers also want to closely monitor the appropriateness of keeping a retirement age, subjecting it to formal review five years from implementation.
Currently, employers can set whatever retirement age they like, with many workers being retired at 60 or younger. The reforms mean retirement ages below 65 will need to be justified as appropriate and necessary.
David Frost, at the British Chambers of Commerce, welcomed the move, expressing relief that ministers had dropped the idea of removing the retirement age completely, or settle for a default cut off point of 70.
"This move today is the best of both worlds. Employers have the ability to define the end point of the employer-employee relationship and employees have flexibility with a right to request to work past the age of 65," he said.
"Britain has the third highest proportion of older workers in the EU. Business is clearly not against individuals working beyond retirement age but firms need to be able to manage future recruitment patterns."