State pension spending is projected to rise from 5 per cent of GDP to around 9 per cent of GDP over the next 50 years, according to analysis from the Office for Budget Responsibility (OBR).

The OBR’s latest Fiscal risks and sustainability report estimated that state pension spending would rise to around 9 per cent of GDP by 2075/76, driven by population ageing and the cost of triple-lock uprating, calculated using historical inflation and earnings volatility.

However, in a scenario where the state pension is instead uprated in line with average earnings, spending would reach around 7 per cent of GDP by 2075/76.

The OBR said the UK’s population is expected to become older over the long term, with the median age rising from 40 currently to 49 by 2075.

It warned this demographic shift is expected to increase pressure on public spending, particularly through higher health and state pension costs.

Currently, the OBR’s baseline scenario assumes that the state pension continues to be uprated by the triple lock, which increases payments by the highest of earnings growth, CPI inflation or 2.5 per cent.

Its alternative earnings-linked scenario would reduce debt by 2075 by around a 10th compared with the baseline.

Broadstone head of policy, David Brooks, said the projections highlighted a growing intergenerational challenge.

“While the triple lock has been successful in protecting pensioner incomes, the cost of maintaining that commitment falls on today’s workers through higher taxation and borrowing,” he stated

“At a time when many pensioners are asset rich and younger generations face significant barriers to wealth accumulation, it is reasonable to ask whether universal increases remain the most effective use of public resources.”

Brooks argued that the debate should not be framed around whether pensioners should be protected from poverty, as this protection remains essential.

“The real debate is whether taxpayer support should be targeted more effectively towards those who genuinely need it, rather than continuing to provide identical increases across the entire pensioner population regardless of income or wealth,” he said.

The OBR noted that its long-term projections should not be treated as precise forecasts, but as illustrations of long-term fiscal pressures and whether the public finances are sustainable under current policy settings.

It warned that, under almost all of its scenarios, public finances would move onto an unsustainable path unless future governments took action.

In its baseline scenario, public spending is projected to rise from 40 per cent of GDP in 2030 to 49 per cent by 2075, with state pension costs one of the main upward pressures.

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