Brydo, my aunt, who is now 100, gave up driving about 8 years ago. For some years she had only been driving on short local journeys to meet and socialise with friends who themselves no longer drove and to go to local shops. She was well aware of her limitations and discussed them with me and her daughter. She had no accidents or incidents but concluded it was time for her to give up the car. This is a woman who is a very experienced driver who drove ambulances during WWII.
I say this because I do not agree with your assertion that people are unable to know/admit when they should no longer be driving.
Forcing driving tests on people simply because they have reached a certain age will undoubtedly cause some of those people to give up their licences and reduce their mobility to avoid the ordeal of sitting a test. This in my view would be very wrong.