The UK government is extending the right to request flexible working to all employees in a bid to stop older workers leaving the labour market.

The proposal, which will come into effect in late June, was published in the Department for Work and Pensions' Fuller Working Lives report.

The paper explained the Coalition wants to stop people leaving the labour market involuntarily in their 50s and early 60s.

According to the DWP, the economy could have been boosted by £18bn in 2013 if the employment gap between people in their 40s and those aged 50 to State Pension age was halved.

"Older workers have a huge amount to bring to any workforce and are a vast untapped talent," said Pensions Minister Steve Webb.

"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 report also called for the appointment of a new Older Workers' Employment Champion – a respected and independent-minded figure who will advocate the case for older workers within the business community and wider society.

The DWP will also launch a new Health and Work Service which will give workers with long-term health problems the support they need to stay in, or return to, work.

"Our ageing society presents many challenges, not the least of which is an ageing workforce. Employers can benefit from the skills and experience of older workers, and in many cases those employees want to carry on working," said Malcolm Small, senior policy adviser at the Institute of Directors.

"This framework is useful in identifying some of the policy steps already taken, and some yet to happen."