The burden on the budget created by the age pension will decrease over time, despite the rapid ageing of the population, but will be overtaken by the cost of superannuation tax breaks, the Intergenerational Report says.

The report, which attempts to forecast key budget pressures and economic indicators over the next four decades, estimates that by 2062-63, when Australia’s population will reach 40 million, there will be 9 million people aged 65 and over, double the proportion now.