More older workers will face an "invisible wall of ageism" when they look for a job as the Government plans to reform benefits, it was warned.
Age UK said more older workers will be stuck in long-term unemployment as a result of moving incapacity benefit claimants on to employment support allowance.
The charity estimated that this measure could lead to over 750,000 more older people returning to the labour market in the next four years.
Ageism is one of the main barriers older people face when looking for a job, with latest figures showing that two in five unemployed over-50-year-olds have been jobless for more than a year.
Michelle Mitchell, Age UK charity director, said: "The spreading perception of ageism in recruitment shows that, for older workers, the job market is still not fit for purpose.
"As more mature workers are pushed into the recruitment arena by the reassessment of welfare-to-work benefits, hundreds of thousands of them will risk coming up against the invisible wall of ageism.
"Before forcing people to rejoin the job market or work for longer, the Government must lay the foundations of a better job market for older people, with fairness and flexibility as cornerstones.
"The implementation of the Equality Act in October this year offers the coalition Government an opportunity to refocus attention on the need to tackle age discrimination in the labour market once and for all."
Chris Ball, chief executive of the Age and Employment Network, added: "Employers of all shapes and sizes need to urgently wake up to the fact that people will need to work longer and make sure that their recruitment policies are fair.
"Extending working lives will not succeed without this overdue shift in culture."