The Government has said that it will outlaw age discrimination outside the workplace by banning most providers of goods and services from treating old people more poorly than younger people.
It accepted that some services, such as insurance, do need to take account of a person's age but said that in these cases providers will have to justify their actions.
The Government commissioned research into age discrimination in the provision of services and found that "there is a clear problem related to finding insurance," according to its consultation document. "Although most people of all ages find a suitable policy easily or very easily, a small but important minority of people think this will be difficult or find it to be so. They end up without the insurance they need to drive (older and younger people) or to travel (older people)."
The Government stressed, though, that it did not believe that age was irrelevant in providing services, just that it should not be used disproportionately.
"We believe that age used properly is a valid criterion for pricing risk. Indeed changes such as outlawing the use of age as a risk factor could actually mean everyone, including older people, losing out," it said. "This is because, in general, prices are fairly based on risk and higher prices are a result of genuinely greater costs."
The Government's preferred solution to the problem is to allow a "tailored specific exception allowing age to be used provided that it is proportionate to risk and costs".
"This approach would allow minimum and maximum age limits and the use of age bands. Evidence of risk factors and data would have to be weighed appropriately but commercial considerations could be taken into account and age-based pricing would not require strict mathematical proportionality," said its consultation.
"A signposting or referral service could be required where financial service providers do not themselves quote for specific age-groups. This option would prevent unjustifiable age discrimination, such as an insurer deciding to offer insurance to older people at inflated prices that are not related to risk. It would provide more legal certainty for providers. It facilitates access to financial services without distorting the market," it said.
"Older people make a strong contribution to society and it is totally wrong if they are treated unfairly," said Vera Baird, the lead minister for the Government's Equality Bill. "They must not be denied a full role in society. We all lose out if people are excluded and it is particularly silly to let that happen because people are getting older; it happens to us all."
The research, which was carried out by consultancy Oxera, found in fact that where age was used in the market for services it was generally being fairly used.
"Age is used as a significant piece of information in determining how customers are treated, including whether the provider will offer a service at all and at what price," its report said.
"From an economic perspective, the risks that are correlated with age are being correctly priced and…in terms of absolute availability there are no significant age-related segments of the market that are currently unserved," it said.
"Overall, there is undeniably a clear differentiation of consumers in the market on the basis of their age. However, the differences are driven by the real differences between age groups in the costs of provision," it said. "The specialisation of providers, combined with differences in the economics of supply, can explain much, if not all, of the differentiation experienced by consumers of different ages in the market."
"Whether this outcome in the market is acceptable of fair…is not an economic question," it said.
The proposed changes are unlikely to have any impact on age-specific holidays, nor on things which are beneficial to old people, such as an increase in free access to health and transport services once people reach a certain age.
The consultation closes on 30 September and the Government plans for its equality legislation to be largely in place by 2012.