Britain could unlock a £100bn economic boost by tapping into an ageing workforce, according to a report.
The move could help the Government avoid a cash crunch, as demographic changes mean that the costs of financing pensions and healthcare are likely to soar.
Accounting giant PwC, which conducted the research, said that increasing the numbers of older people in employment could “boost tax revenues and reduce benefit payments significantly”.
Jon Andrews, of PwC, said: “Our research shows there could be big gains for the UK economy from policies directed at keeping people skilled and motivated to stay in the workforce for longer.”
According to PwC’s Golden Age Index, which reflects the importance of older workers to the economy, Britain sits at 19th place in the 34-strong OECD group.
Nordic countries take up three of the top five spots, with Sweden the strongest in the EU. By raising the proportion of working British 55 to 69-year-olds to that enjoyed by Sweden, GDP could be around 5.4pc larger, the consultancy said.
Sweden has introduced a programme of reforms since the 1990s to encourage people to stay in work for longer, and has some of the highest employment rates for older workers, especially among women.
John Hawksworth, PwC’s chief economist, said: “This would also boost annual tax revenues and reduce benefit spending significantly, helping to meet the long-term health, social care and state pension costs of an ageing population.”
Sweden has also implemented tax reductions for employers that take on older workers.
The country has also introduced a state pension that can be drawn from 61, but pays out more the longer claimants hold out without it.
Baroness Ros Altmann, the minister for pensions, said: “It is clear that, as the Government works towards its goal of achieving the highest employment rate in the G7, better management of our ageing workforce will play an essential role.
“We must continue to address the barriers to fuller working lives and where we can learn from other countries in this regard, we should.”