A Government review of retirement age will take place a year earlier than planned, as pressure mounts to abolish compulsory retirement at 65.

Currently employers can require all staff to retire at 65, regardless of their circumstances – but 1.3 million people work beyond the retirement age, and many more say they would if they were permitted by their employer.

A review of retirement age had been due in 2011, but Angela Eagle, the minister for pensions and the ageing society, today announced that the review will happen next year “to respond to changing demographic and economic circumstances.”

The move was welcomed by age charities and trade unions, but it caused consternation amongst business groups.

Michelle Mitchell of Age Concern and Help the Aged said: “The Government should immediately put a stop to an arbitrary and unfair rule which stops people from working, simply because of their age.

"Older workers make a huge contribution to the economy and will have the skills and experience needed to boost recovery as we come out of recession.”

But Katja Hall of the CBI, the business lobbying organisation said: “Some people can happily work in their existing job beyond the age of 65, but this is not possible for all occupations, and companies with small numbers of staff have particular problems adapting jobs to the needs of older workers. No-one has yet suggested a workable alternative to the default retirement age.”

The Equality and Human Rights Commission already argues that a compulsory retirement age is discriminatory and unfair.

The Government's announcement came on the same day that a solicitor who was forced to leave his job at the age of 65 has bought his case to the Court of Appeal.

Leslie Seldon, now 68, was forced to retire from the law firm where he had worked as a civil litigator for 35 years – even though he was fit and wanted to continue working.

A separate challenge to the legality of Britain’s retirement age, bought by Age Concern and Help the Aged, will also be heard on Thursday at the High Court. Scores of age discrimination claims are on hold awaiting the outcome of the decision.

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