State Pension 

UK state pension worst in the developed world

Because of this, National Insurance contributions will need to rise by 5 per cent to sustain the state pension.

Baroness Altmann added: "Policymakers face difficult decisions and are also likely to need to increase state pension age further."

The government announced in July that the state pension age increase should be brought forward to 68 between 2037 and 2039, due to increases in life expectancy.

Under the current law, the state pension age is due to increase to 68 between 2044 and 2046.

The change to the state pension age will leave 7.6m people £10,000 worse off, according to analysis by the House of Commons Library.

From next April, the rate of the state pension for new pensioners will rise in line with inflation by £4.80 from £159.55 to £164.35 per week.

maria.espadinha@ft.com