The Department for Work and Pensions (DWP) has outlined how a coalition of jobcentres and businesses can combine to support older workers to continue their careers or start new ones.
Its Fuller Working Lives strategy highlights the need for companies to "retain, retrain and recruit" people aged 50 and over, as it is estimated they will compromise more than half of the UK adult population by the 2030s.
As well as having health benefits, the government believes that by delaying retirement until 65, individuals on average earnings could increase their pension pot by 55%.
Secretary of State for Work and Pensions, Damian Green, said: "Most people are healthier for longer and so are able to extend their careers and take up new opportunities.
"Staying in work for a few more years can make a significant difference not only to someone's income but also their physical and mental health.
"I urge all businesses to reassess the value of older workers. Nobody should write off hiring someone due to their age and it's unacceptable that some older people are overlooked for roles they would suit completely."
The average age of leaving the labour market is not keeping pace with increases in life expectancy, according to the DWP, with one-in-four men, and one-in-three women reaching state pension age without working for five years or more.
Legislation has been introduced to remove the default retirement age, and give the right for everyone to request flexible working, while the new strategy intends to continue
supporting older workers by: Publishing a range of evidence outlining the benefits of working longer
Giving additional help for groups who may need more support getting into and staying in work, including people with long-term health conditions and disabilities
Putting control of adult skills budgets in the hands of learners and employers, achieving 3 million apprenticeship starts in England by 2020 - which are available to people of all ages and backgrounds
Continuing to develop the support available through jobcentres for older workers.
Aegon pensions director, Steven Cameron, said: "In today's society, there's no place for a 'fixed retirement age'. Flexible working up to and beyond traditional retirement ages is becoming the new normal, and an increasing number of older workers relish the opportunity to stay in work.
"Working for a few more years can make a big difference to the pension fund individuals can build up, and deferring when to start taking retirement income also means it's more likely to go the distance.
"Employers can also benefit. By offering choice to their workforces, they can benefit from a diverse workforce and retain talent and expertise that in days gone by were often lost."
You can read more about the government strategy here.