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The triple lock should be scrapped, Sir Tony Blair’s think tank has said in a proposal for the biggest overhaul of the state pension since it was introduced in 1948.

The former PM’s Tony Blair Institute has issued a new report calling for the state pension to be replaced with a “Lifespan Fund” that it claims is “built for longer and more fluid lives”.

It argues the state pension is “outdated, increasingly unaffordable, and too rigid for the way people live and work” because it concentrates state-supported income support at retirement.

The triple lock is a government guarantee to increase the state pension each April by the highest of three metrics – average wage rises, inflation, or 2.5 per cent.

This is intended to protect pensioners’ incomes over time and is highly valuable to recipients. Critics say it is no longer affordable, but politicians have been loath to commit to changing it, given its popularity with older voters.

The full state pension is worth £241.30 a week, or £12,548 a year.

Defenders of the state pension note that the money paid out is spent back into the economy, which supports growth, but the TBI claims “reform is now unavoidable” since the number of pensioners will rise from 12.6m now to 19m by 2070.

The cost to the state could rise from 5 per cent of GDP now to 7.8 per cent by then – an extra £85 billion a year.

In a recent report from Almond Financial, Britain had the 13th most generous state pension in Europe. Luxembourg was top, followed by Norway, Spain and Malta.

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Tom Smith, director of economic policy at the Tony Blair Institute said: “Britain’s state pension system was built for a different era. We can’t keep pouring money into a system that is increasingly unaffordable. Pension spending must be contained, and that means the triple lock cannot continue after the next Election.

“Ending it will require political leadership from all parties – but that should only be the first step. Real reform must also build a better system: one that is fairer, more flexible, and designed for how people live today.”

Nigel Farage of Reform UK has recently pledged to keep the pension triple lock, but cut other welfare payments to pay for it.

Labour MP Graeme Downie said the triple lock should be reformed to fund an increase in defence spending.

He wrote in The House magazine that the government should be brave enough to ask older people who “benefited financially from peace” to make a greater contribution to future national security.

“If there is to be a true whole of society approach to defence, and younger people could be expected to die, what are older people willing to sacrifice?” he wrote.

The report calls for the recently re-established Pensions Commission to foster cross-party agreement before the next election, paving the way for the triple lock to be replaced from 2030 with a smoothed link to earnings.

Under the proposed Lifespan Fund savers would build up entitlement through contribution across their lives – including through work, caring, study and other recognised activity.

They could bring forward some of those payments, for example if unemployed or retraining.

People could choose when to convert their Lifespan Fund into a guaranteed pension for life, with the annual amount adjusted on an actuarially fair basis to reflect age and health.

Tom Smith added: “TBI’s proposed Lifespan Fund offers that better alternative. It replaces the one-size-fits-all state pension with a personalised system that people build up through active contribution across their lives. It gives people real freedom to use support earlier in life – to retrain, care for relatives or manage periods out of work – and to top it back up before retiring on their own terms. It is the upgrade Britain needs.”

AJ Bell director of public policy, Tom Selby, said: “A radical plan to overhaul the state pension and replace it with a more flexible system that allows people to take a lower income but start claiming earlier might seem sensible.”

“But the proposals are complex and the prospect of the government calculating an ‘actuarially fair’ retirement income for each individual based on key details like their personal health records feels somewhat dystopian, and would clearly be vulnerable to people gaming the system by over-stating ill-health and habits like drinking and smoking.”