Britain’s ageing population is threatening a pensions time bomb that could cost as much as £750billion, the International Monetary Fund has warned, The Telegraph reported.
The IMF said that even a slightly faster than expected increase in life expectancy could impose a huge new financial burden on Western economies such as Britain. “The time to act is now,” it said.
Governments and the financial sector have consistently underestimated how quickly average lifespans will rise, IMF researchers found.
They believe it has been routinely understated by about three years, which could render public finances unsustainable, they warned.
For Britain, the IMF calculated that on the “not unreasonable” assumption that the entire cost would fall on taxpayers, the country’s public debt would rise from 76 per cent of gross domestic product to as much as 135 per cent.
In today’s money, that additional cost would be about £750 billion.
