State pension shake-up could see retirement pushed back to 80

Research by Barnett Waddingham estimates that contributions might have to rise by around 50 per cent to avoid increasing the pension age, as Britain’s ageing population and longer life expectancy put growing pressure on public finances.

The state pension age is already set to rise from 66 to 67 by next year, with another increase to 68 planned for 2046.

Barnett Waddingham warned that for younger generations, retirement could feel like “a pot of gold at the end of the rainbow,” always moving further out of reach.

The warning comes as Chancellor Rachel Reeves prepares her Autumn Budget on November 26, where she may drop Labour’s promise not to raise certain taxes.

Meanwhile, the triple lock, which guarantees the state pension rises each year by the highest of inflation, average earnings growth or two per cent, is under growing pressure, with critics questioning whether it can be afforded in the long term.

Demographic changes are putting growing pressure on the state pension system, with 11 million people in England and Wales now aged 65 or over, including more than half a million aged 90 and above.

The number of over-65s is expected to rise by another five million over the next two decades.

In July, the Office for Budget Responsibility estimated that keeping the triple lock in place would add an extra £15.5billion a year to government spending by the time of the next general election.

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Experts warn that the combination of a rising older population and the costly pension guarantee risks pushing the system beyond sustainable levels.

Stuart McDonald, a partner at LCP consultancy, explained to the International Business Times that whilst UK life expectancy for young adults increased by 17 years throughout the twentieth century, the state pension age remained unchanged.

He warned this mismatch would create "historically long retirements" that would "inevitably prove fiscally unsustainable".

LCP recommends increasing the pension age by twelve months each decade to prevent retirement periods from extending further.

Former Liberal Democrat business secretary Sir Vince Cable has joined calls for reform, stating the triple lock "is not sustainable and makes no sense in the long run" whilst suggesting "a substantial tax is unavoidable" in the upcoming budget.