CBI director general Digby Jones

The CBI has warned that moves to lift the retirement age could cause more problems than they solve.

The business lobby said that the idea being floated by ministers risks "embittering the retirement process" and could lead to a surge in employment tribunal cases.

The government is considering scrapping retirement at 65 as part of a package of proposals on age discrimination and tackling the savings crisis.

But, publishing its submission to the Department for Work and Pension's consultation, the CBI stressed that current retirement system enables individuals to "retire with dignity rather than in conflict".

The employers' organisation said workers should not have a right to remain in employment after 65, although age discrimination should be outlawed.

Director general Digby Jones said "flexibility" was the key to reaching the best possible policy.

"Both employers and employees need flexibility to reach a consensus on retirement," he said.

"Neither party should have to maintain an employment relationship longer than they want to. The world of work has changed and everyone needs choice.

"UK firms already have the third highest participation of older workers in the EU and removing the normal retirement age would go far beyond the retirement arrangements of many European countries."