The Employment Equality (Age) Regulations came into force in 2006, and made it unlawful to treat a person differently in the workplace because of their age, unless there is very good justification for doing so. As of 1st October 2010, all existing equality legislation (including the 2006 Regulations) was consolidated into the Equality Act 2010 ('The Act').
The fact is, service related pay and benefits are widely used to motivate staff, reward loyalty and recognise experience at work. So although such practices may discriminate against younger workers, they are generally thought to be good for the workforce as a whole. That is why these kind of benefits were given some protection by the Age Regulations and this protection has now been incorporated into the Equality Act.