People who do not wish to retire when they hit the state pension age should be allowed to continue to work, ministers have agreed.

They plan to incorporate the change into new legislation which will come into effect in January 2016.

Workers and their employers will discuss how best older members of staff can continue to contribute. This could be done by extending their current contract, giving them a short-term contract or using them as temps.

The over-65s can be cheap to employ because they already have a pension and may be willing to work for less than their previous salary. Nor do they have to pay various work-related premiums, news agency ANP says.

Older workers

The number of people aged 65 and over who still work has topped 200,000 for the first time, ING economists said earlier this month.

On average they work 18 hours a week and three out of four older workers are male. Nowadays, one in 12 people work past the official retirement age, compared with just one in 30 ten years ago.

The government is in the process of raising the state pension age to 67, in line with increases in life expectancy.