Britain will effectively go bust by 2060 unless the government offsets the cost of the ageing population with extra tax hikes or spending cuts, an independent watchdog has warned.
The Office for Budget Responsibility (OBR) estimated that a further tightening of up to £57 billion - equivalent to 12p on income tax - could be needed after 2016-17 to rein in public sector debt over the long-term.
The grim prospect was raised in the OBR's first report on the future of the government's finances.
The body said that as people live longer, health, social care and state pension costs will set off on an "unsustainable upward trajectory" over the next 50 years.
Without further action to raise revenues or curb spending, public sector net debt is expected to hit 107% of GDP in 2060-61.
The OBR said it calculated that permanent tax rises or spending cuts worth £22 billion in today's prices would be required in 2016-17 to maintain debt at the previous target of 40% of GDP. It stressed that such a move could be staggered over time.
However, the report also warned that the real problem could be even bigger, as the labour-intensive nature of the NHS meant its productivity was likely to improve more slowly than the rest of the economy.
For the health sector to maintain its "output" relative to the rest of the country, its budget will have to rise as a proportion of GDP.
That could increase the tightening needed to 3.9% of GDP - some £57 billion in today's prices.
The OBR said the estimates were "sensitive", and demographic factors such as the level of immigration could have a significant impact on the situation.
