Minister for Pensions Steve Webb has launched a new action plan to help older workers stay in the workplace.
The government's new measures to support the economy, workers and businesses are set out in Fuller Working Lives - a framework for action published today.
The plan finds the economy could have been boosted by £18 billion in 2013 if the employment gap between people in their 40s and those aged 50 to State Pension age was halved.
New measures and action set out in Fuller Working Lives - a framework for action include an extension of the right to request flexible working to all employees in June 2014.
In addition, the launch of a the much anticipated Health and Work Service will give workers with long-term health problems the support they need to stay in or return to work, the DWP said.
Additonally, a new Older Workers' Employment Champion will be appointed. The DWP described this as a figure who will advocate the case for older workers within the business community and wider society
Pensions Minister Steve Webb said: "Older workers have a huge amount to bring to any workforce and are a vast untapped talent.
"We are living longer and can expect many more years of healthy life. It's great news - but it's something that as a society and as an economy we need to respond to.
"The business case is compelling and the research we are launching today sets out clearly the advantages for individuals, employers and the state."
According to Office for National Statistics estimates, in the next 10 years there will be 700,000 fewer people aged 16 to 49 but 3.7 million more people aged between 50 and State Pension age.
Today's announcement builds on previous measures over the past 4 years to tackle age discrimination in the workplace. These include the removal of the default retirement age, making it illegal to sack a person simply for turning 65.