A review of the default retirement age is to be brought forward to next year.

Currently employees must retire at 65 regardless of their circumstances at the request of the employer. The review, brought forward one year to 2010, aims to look at ways of giving employees more flexibility.

The majority of people retire before 65, however 1.3m people choose to work beyond state pension age, and many more say they would work past 65 if their employer permitted it.

Minister for Pensions and the Ageing Society Angela Eagle said: "It is time to look again at this. Some people prefer to take early retirement, others prefer to keep working. We want to give older people flexible retirement options. The Government is responding to the changed economic landscape. The different circumstances today - for businesses, and for individuals coming up to retirement - suggest that an earlier review is appropriate.

"As Britain's demographics change, it is sensible that we have the debate on what works for business and individuals. The retirement laws need to reflect modern social and economic circumstances."

The review is part of the latest in the series of announcements to follow the publication of the Government's plan for 'Building Britain's Future', drawing together action to help individuals, families, businesses, public services and communities respond to demographic change. It follows the Government’s major reforms to respond to demographic change including the Turner reforms to the Pension system, the measures to outlaw age discrimination in the new Equality Bill, and the new Care and Support Green Paper to be published this week.

The Trades Union Congress welcomed the decision to bring forward review of default retirement age.

General Secretary Brendan Barber said: "We welcome the early review of the default retirement age. It cannot be right that an employer can sack someone simply for being too old. Employees should have choice - neither forced by employers to give up work, nor forced by inadequate pensions into working longer than they should.

"A key challenge as we live and stay active longer is developing the right kind of jobs, support and training for older workers."