UK adults who continue to work past state pension age should have to pay National Insurance which could then be passed on as tax breaks to companies employing young staff, according to a Conservative MP.

Therese Coffey, the backbench MP for Suffolk Coastal, called for the government to introduce the policy, which would see the extra funds given directly to under-25s on less than £20,000-a-year in the form of a National Insurance holiday.

Following the scrapping of the default retirement age, more and more people are set to work past the age of 65, at which point they currently stop making National Insurance contributions.

The Treasury estimates that up to £2 billion could be raised by altering the rules and making pensioners pay National Insurance.

"One of the things I have found from talking to employers is that they are not so keen to take on young people and this would make it more attractive," Ms Coffey said.

"When they take on somebody with 20 years of experience they are already really productive. I think in this challenging climate they are more likely to go for somebody with experience rather than somebody who is fresh."