Overview

• The OBR’s July report projects debt to climb from under 100% of GDP now to about 270% by 2070 without policy change.
• Self-imposed fiscal rules introduced in late 2024 leave the government with very limited margins to absorb new shocks or pursue spending commitments.
• The state pension triple lock has driven pension costs to roughly three times original forecasts and will raise pension spending from 5% of GDP to nearly 7% by the 2070s.
• Climate transition costs and extreme weather impacts could add the equivalent of 74% of GDP to government debt by the early 2070s.
• The decline of defined benefit pension schemes is reducing traditional gilt demand and increasing reliance on overseas investors for UK debt financing.