Debt-laden governments must encourage older people to keep working to offset a growing imbalance between workers and retirees because of a plunging birth rate, the International Monetary Fund (IMF) has warned.

It said older people today are far sharper and stronger than they were 25 years ago, with their research showing that someone aged 70 in 2022 had the same cognitive function as the average 53-year-old in 2000.

The world’s lender of last resort said the combination of plunging birth rates and people living longer will contribute to knocking 1.1 percentage points off global growth each year for the next quarter of a century, compared to the pre-pandemic average.

The Fund argued that to ease fiscal pressures caused by an ageing population, governments must look to overhaul pension ages, slash early retirement benefits and encourage workers to delay their retirement. It does not suggest ways to increase the number of births.