The triple-lock deal, under which pensioners in the UK receive guaranteed rises, should be scrapped, according to an influential committee of MPs.
Pensions rise by a minimum of 2.5 per cent, the level of average earnings or the rate of inflation, according to which index is the higher.
But the so-called triple-lock arrangement, which has been in place since 2010, is unfair on younger families, according to the Work and Pensions Committee.
Instead pensions should be linked to average earnings with a deal put in place to ensure they could not fall too far behind in times of inflation.
Committee chair, Labour MP Frank Field said: “It is time for the triple-lock to be shelved.”
His committee’s report points to the cost of pensions in the last tax, £98bn, as being unsustainable.
But in a statement by the Department for Work and Pensions, the government said it was “committed to the triple-lock, which is protecting the incomes of millions of pensioners.”