Governments across Europe should do more to tackle ageism and help create jobs for an older workforce, a new study has urged.
The International Longevity Centre (ILC-UK) think-tank warned that Europe faces a "significant" skills gap due to demographic changes as incentives to retire early have gradually been removed.
In the UK, 13.5 million job vacancies will need to be filled over the next decade, but only half that number of young people will leave education, said the report.
Governments have not met a European Union target to achieve a 50% employment rate of older workers by 2010, it was found.
David Sinclair, assistant director of policy ILC-UK said: "Europe's economy is driven by the skills and talents of its people. As our society ages, it will therefore be increasingly important to make the most of the potential of older workers. Yet few European Governments have got to grips with the challenges of an older workforce.
"Flexible working and opportunities for people of all ages to develop their skills are vital. We must tackle ageism whilst also offering older people the opportunity to retire gradually. Governments across Europe must better evaluate initiatives and share their successes with their colleagues".
Pensions Minister Steve Webb said: " There are more older people in work than ever before, despite difficult economic conditions. Back in 2011 we took action so that older people were no longer discriminated against by abolishing the default retirement age.
"I am determined that more employers will make the most of the talents and experience of older workers."