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   From: yourdime@outlook.com   
      
   The last Baby Boomer turns 60 this year. Many born between 1946 and 1964   
   have already retired, and millions more will follow in the coming years,   
   with the number of people reaching state pension age forecast to hit a   
   record 800,000 in 2028 for the first time. By then the earliest anyone   
   will be able to claim their state pension will be 67, up from 66 today.   
      
   Rising longevity meant that for decades, raising the state pension age was   
   the silver bullet that helped to defuse Britain’s demographic time bomb.   
   But not for much longer.   
      
   Until now, a rising age limit has kept the Baby Boomers working, boosting   
   a jobs-rich recovery in the wake of the financial crisis and keeping the   
   economy afloat.   
      
   It meant politicians could think of paying pensions as tomorrow’s problem   
   – a long-term challenge of slow-moving demographics that could always be   
   left to a future government.   
      
   But that time bomb is still ticking. And Britain’s falling birth rate and   
   life expectancy means it’s about to explode amid this huge wave of   
   retirement.   
      
   The Telegraph is examining the future of the state pension in a three-part   
   series that will focus on the implications for work, retirement and living   
   standards for different generations.   
      
   In this first instalment, we look at whether the Government can keep   
   making the sums add up when the pensioner population is expected to rise   
   from 12m today to 17m by 2070.   
      
   Trouble ahead   
   The working age population is expected to increase by just over 1m to 44m   
   over that period.   
      
   Already, £1 in every £8 of government spending goes on the state pension.   
   Fast forward 50 years, and that number will be more like £1 in every £6.   
      
   A wave of retiring boomers is expected to push up the pensions bill   
   dramatically this decade. While raising the state pension age to 67 by   
   2028 will stem the rise in costs, the Office for Budget Responsibility   
   (OBR) predicts overall spending on the state pension will be £23bn higher   
   in 2027-28 than it was at the start of the 2020s. This jump is not   
   happening within five decades, but five years.   
      
   Sir Charlie Bean, a former OBR official, says the world took a global   
   peace dividend and era of cheap money for granted, spending extra money   
   with abandon, which is now coming back to bite.   
      
   “If you go back about 50 years about a quarter of [state] spending was on   
   health and welfare including pensions. That has risen to about half,   
   essentially because of these demographic forces - ageing - and also the   
   nature of technical change in the health sector,” he says, noting that   
   medical innovations are often expensive.   
      
   “Three things have made room for it. Firstly, declines in public   
   investment; secondly declines in defence spending [that came with] the   
   cold war dividend; and thirdly a fall in contribution from debt interest.”   
      
   Suddenly those have reversed, with serious implications for spending in   
   the next parliament at a time when money is already very tight.   
      
   The OBR believes spending on state pensions will rise from 5.1pc of GDP   
   this year - or around £130bn in today’s money - to 8.6pc of GDP in 2073,   
   or around £230bn. An older population also means more demand on health   
   spending, which is set to increase from 8.2pc of GDP this year to 15pc of   
   GDP.   
      
   While a fall in the number of young people will reduce spending on schools   
   over this period, the surge in older-age costs will swell the state to   
   more than half the size of the economy, up from 33pc pre-pandemic and an   
   estimated 38pc by the end of the decade.   
      
   Governments have two choices if they want to constrain state pension   
   spending in the future. Make people wait longer to claim it, or make it   
   less generous.   
      
   Life’s too short   
   The question of when the state pension age should rise from 67 to 68 has   
   already been the subject of two independent reviews.   
      
   John Cridland, author of the first report in 2017, suggested it should   
   rise to 68 between 2037 and 2039. Baroness Neville-Rolfe, the author of   
   the second, said that based on the rule of thumb that people should spend   
   roughly a third of their adult life in retirement, it should not rise to   
   68 until 2041-43.   
      
   But falling life expectancy has thrown a spanner in the works, forcing   
   Jeremy Hunt to delay a decision on when to next increase pension age for a   
   second time.   
      
   Advances in healthcare and better working conditions have resulted in four   
   decades of improving life expectancy. But the rate of increase has slowed,   
   and not just because of the pandemic.   
      
      
   Life expectancy growth has been slowing since 2011, with pandemic deaths   
   in 2020 and 2021 sending progress into reverse. Life expectancy is roughly   
   now back to where it was a decade ago, according to the Office for   
   National Statistics (ONS).   
      
   UK life expectancy at birth is now estimated to be 78.6 years for males   
   and 82.6 years for females, according to the ONS. That’s 38 weeks fewer   
   for males and 23 weeks lower for females compared with 2017 to 2019.   
      
   Cridland, who wrote the first report for the Government, says: “I think   
   there’s quite a lot of evidence that the continuing increase in longevity   
   is topping out. And that is overlaid by the pandemic, but actually the   
   signs were already there. If that’s the case, then you could argue the   
   trajectory for further tightening of the state pension, both in age and   
   support, could become more muted. My instinct is that the days of big   
   increases in longevity are fading.”   
      
      
   There is also the issue of how fit people remain after they retire. The   
   ONS defines this as an estimate of how much people believe their lives are   
   spent in “very good” or “good” health. And the evidence suggests this is   
   also in decline, with Scots seeing the biggest deterioration over the past   
   few years.   
      
   Britain’s not working   
   Sick Britain has barely been out of the headlines since lockdown, with the   
   number of people neither in work nor looking for a job currently at a   
   record high of 2.8m.   
      
   A rise in back and neck pain among older workers is partly to blame. The   
   UK is one of eight OECD countries where at least 20pc of adults aged over   
   65 report “severe limitations in their daily life”, according to the   
   think-tank.   
      
   Alongside Denmark and Norway, Britain also has the highest levels of   
   statin consumption per head in the OECD, and the third-highest use of   
   antidepressants.   
      
   This matters because the state pension is paid from the taxes of people in   
   work today, so the more people there are in work relative to those   
   retired, the better.   
      
      
   In 2020, there were around 30 pensioners for every 100 people of working   
   age. That has already risen to almost 32 pensioners, and will hit 35   
   before the decade is out – the timeline over which financial decisions at   
   next week’s Budget are being made.   
      
   Making people wait longer to claim their pension may seem obvious, but it   
      
   [continued in next message]   
      
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