More than a million older workers cannot get a job because of a lack of investment by employers, a report by the TUC has claimed.
The TUC wants employers to conduct an "age audit" of staff
The trade union organisation said workers were being put on the "scrap heap" when they were keen to work.
The TUC blamed a failure to put cash into retraining for those over 50.
It urged employers to conduct an "age audit" of staff to stop discrimination and retain older workers, but the CBI said employers were doing their best.
TUC deputy general secretary Frances O'Grady said: "Most baby boomers are not retiring early to cruise around the world or go bungee jumping.
"They have been dumped out of work and on to the scrap heap and are scraping by on benefits or small work pensions.
"By refusing to retain and recruit older staff who want to work, employers are accelerating the demographic time bomb the economy is resting on."
A TUC study suggested just one in eight jobless people had taken early retirement.
'Demographic time bomb'
The TUC predicted the size of the potential workforce aged between 50 and 69 would rise by 17% over the next decade.
Employers' organisation the CBI said firms did their best to hire older people.
Director of human resources policy Susan Anderson said: "Evidence suggests that older people do find it hard to find a job and this is mainly because they have lower skills levels, particularly in regard to the literacy and numeracy requirements of the modern workplace.
"However employers are very aware of the benefits and advantages which older people offer, especially their attitude to work and their customer service skills, so where possible they will do all they can to hire and retain them."