State pension reforms calls grow as Labour called to 'manage the cost of' DWP payments

The assessment will scrutinise the connection between retirement age and life expectancy, alongside questions of intergenerational equity.

Financial services firm AJ Bell has raised alarm bells about the mounting fiscal pressure created by Britain's ageing demographics with proposals being put forward to reform the triple lock and hike the state pension age sooner than expected.

The investment platform highlighted how demographic shifts are creating an unsustainable imbalance. With retirees living longer and birth rates declining, the ratio of workers supporting each pensioner continues to deteriorate, placing unprecedented strain on public finances.

Independent fiscal analysis reveals the true scale of the financial challenge facing Britain's pension system. The Office for Budget Responsibility (OBR) has calculated that the triple lock mechanism will cost taxpayers £15.5 billion each year by the 2029-30 financial period.

State pension expenditure is forecast to surge from its current level of five per cent of gross domestic product (GDP) to 7.7 per cent by the early 2070s.

Notably, the OBR has identified the triple lock guarantee, when combined with Britain's changing demographics, as a primary driver of this dramatic spending increase.

The organisation has called for a comprehensive reassessment of the policy alongside broader age-related expenditure to safeguard the nation's financial stability.

Accelerating the timeline for raising the retirement age beyond current plans represents one potential solution, according to AJ Bell's analysis.

Ms Vahey noted that while adjusting the pension age offers one mechanism for controlling costs, "the elephant in the room is that the state pension age is just one lever Government has to help manage the cost of the state pension the other is reforming the triple lock".

The OBR has explicitly recommended reviewing the triple lock guarantee as part of broader reforms to age-related spending, warning that without action, the current trajectory remains financially untenable.

Ms Vahey added: "This latest state pension age review, however, may eventually force the Government’s hand. State pension benefits are one of the single biggest expenses for the Treasury and account for more than 80 per cent of the £175 billion pensioner welfare bill.

"Without policy intervention, state pension costs are set to spiral to nearly eight per cent of GDP over the next 50 years based on the current trajectory, up from 5.2 per cent today.

"The second state pension age review in 2023 recommended that the increase to 68 should be introduced between 2041 and 2043 to help reduce costs, although the Government under Rishi Sunak opted not to commit to that timetable.

"However, the new Labour Government may feel it needs to consider the rise to age 68 more closely, particularly if it wants to demonstrate steps toward long-term fiscal prudence."

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Retirement experts from Spencer Churchill Claims Advice broke down why the triple lock has become a difficult policy issue for policymakers to tackle.

They shared: "The Government has pledged to maintain the triple lock until the end of this parliament, but beyond that, nothing is guaranteed.

"No party wants the backlash of scrapping it outright, but behind the scenes, reform is a live discussion.

"There’s even speculation that changes to the state pension age, which is set to rise again, could be linked to debates about the triple lock’s future."