Half of all retailers set a maximum recruitment age, a quarter use age to select employees for compulsory redundancy and 10% ­­­specify age in recruitment advertising, according to a report published by the Department for Work and Pensions.

The report, commissioned by DWP's Age Partnership Group and Age Positive campaigns, warns employers in the retail ­sector that they need to ­do more to tackle age ­discrimination ahead of ­legislation that will outlaw it from October.

From then, it will be ­illegal to discriminate on the grounds of age in areas such as recruitment, training, promotion and ­retirement. It will cover all employers, both large and small, in both the private and public sectors.

James Purnell, minister for pension reform, said: "We are working with employers to remove compulsory retirement ages and adopt flexible approaches.

"We have an ageing population, with many older people who want the choice to continue working rather than retire. We know that older workers have a lower rate of absenteeism and are better motivated. And we believe that this has a positive impact for businesses who can benefit from a more flexible workforce with a wider range of skills."