POLITICIANS have been urged to show “moral and political” leadership by overhauling the current “unsustainable” UK state pension scheme.

A report by the Reform Scotland think-tank said population projections, which show a significant increase in the number of pensioners over the next 25 years, should serve as a “reality check” to all parties.

The organisation has highlighted its own proposal – the Pensions Guarantee – ahead of the Budget on Wednesday.

Official statistics show the number of people over state pension age in the UK is expected to grow by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042.

Reform Scotland said the ageing population, which is growing at a faster rate than the working-age population, means the affordability of the state pension in its current form is unsustainable.

The state pension age is currently 65 for men and is gradually increasing for women from 60 to 65. It is due to increase again for both men and women over the coming years, with the UK Government setting out proposals to increase the age to 68 between 2037 and 2039.

At present, payments are funded through National Insurance contributions but the rules over entitlement were changed from April 2016.

The UK Government said these changes were designed to simplify the system but Reform Scotland has argued it should be overhauled completely.

The think-tank’s proposal for a Pension Guarantee, first published in 2014, would see National Insurance phased out and replaced by a compulsory system where individuals pay a percentage of their salaries into a defined contribution scheme.