The Equality and Human Rights Commission says it's time for the government to scrap the default retirement age.
At the moment firms can force staff to finish work at 65, but the equality watchdog says getting rid of the law would help businesses become more flexible and improve occupational health.
The report claims working just an extra 18 months would earn the country an extra £15 billion.
It comes just days after a survey by the Federation of Small Businesses found eight out of ten small businesses want the retirement age scrapped, with three quarters calling for retirement to be jointly decided by employer and employee.
Baroness Margaret Prosser, deputy chair of the Commission, says "as the economy recovers we face a very real threat of not having enough workers - a problem further exacerbated by the skills lost by many older workers being forced to retire at 65."
