British employers will no longer be allowed to force people to retire at 65 years old, unless they can justify the dismissal, the government said Thursday in a bid to lessen pension payouts as Britons live for longer.

The move was welcomed by nonprofit organizations campaigning against age discrimination. Others, however, complained that the move will make it expensive for employers to continue to provide benefits such as health or life insurance to employees older than 65.

Employment relations minister Ed Davey described the decision as “great news for older people, great news for business and great news for the economy.”

“Retirement should be a matter of choice rather than compulsion,” he said. Previously, employers could compel workers to retire at 65.

Most firms do not impose a fixed retirement age, and there are around 850,000 workers older than 65 in the U.K. There has been no evidence that productivity declines after that age, Davey said.

The government added that individual employers — such as those hiring police officers and air traffic controllers — will still be able to operate a compulsory retirement age “provided that they can objectively justify it.”

The new policy will become effective on Oct. 1, the Department for Business, Innovation and Skills said. The government also said it will raise the eligibility age for state pensions from 65 to 66, effective in 2020.

The news came days after a former television presenter won a case against the BBC for wrongful dismissal on the grounds of ageism,  setting a precedent that could change the U.K. broadcasting industry by making it harder to favor young female presenters over their older colleagues.

Miriam O’Reilly, 53, complained to the employment tribunal that she was warned about her “wrinkles” and asked if it was “time for Botox” by her employers. She said she was not given a reason for her dismissal, and only told that the show needed to be “refreshed” as it moved to a prime-time slot.

The BBC said Tuesday it accepted the tribunal’s ruling, and it will set up new rules on fair selection procedures for presenters.

The case was similar to age discrimination suits brought against U.S. television stations. Last year, three veteran female reporters settled a suit against a Kansas City, Mo., station in which they claimed that they were pulled from anchor spots or had their schedules changed, partly because they are older than 40.