European governments could put an end to the pensions time bomb by raising the retirement age to 69 by the 2030 according to a report by Merrill Lynch.
The research based on computer modelling warns governments that if they fail to take action and benefits are not cut, contributions would have to double within 40 years.
The increase would take it from 13.76 per cent of average salaries in 1990 to 25.86 per cent in 2030.
This is because the old age dependency ratio, the number of people working compared to those in retirement, is expected to fall from 4.8 workers in 1990 to 2.6 workers in 2030.
But the report says if governments were to phase an increase in retirement from 65 to 69 over the next 40 years, contributions would only need to rise from 13.76 per cent in 1990 to 17.17 per cent in 2030.