LONDON (MarketWatch) -- The U.K. government on Thursday announced a shake-up of the state pension scheme, which could see the pension age for men increased to 66 a decade sooner than previously expected.

The pension review came after Chancellor George Osborne promised in his emergency budget Tuesday that the state pension will go up at least in line with average earnings from 2011.

Included in Thursday's announcement was a plan to phase out the default retirement age -- which currently allows companies to force workers to retire at 65 -- and a consultation on how to lift the state pension age to 66.

While the government didn't suggest a specific date for the increase in the retirement age, press reports said it could come as soon as 2016 for men, or ten years earlier than the last government planned. For women, the pension age would be lifted a few years later, the Telegraph newspaper reported.

"People are living longer and healthier lives than ever, and the last thing we want is to lose their talent and enthusiasm from the workplace due to an arbitrary age limit," said Secretary of State for Work and Pensions Iain Duncan Smith in a speech.

"We also need to recognize that to meet the challenge of providing an affordable, stable pensions system in a society with ever increasing life expectancy, people will need to work longer," he added.

The U.K. government is introducing a 40 billion-pound ($60 billion) package of spending cuts and tax increases as it attempts to reign in borrowing and reduce the country's deficit. See full story on the U.K.'s emergency budget.

The government also wants workers to be automatically enrolled in workplace pension schemes by 2012 at the latest.

Under the current timetable, the state pension age will rise to 66 by 2026, 67 by 2036 and 68 by 2046.