New calculations from pension provider Aegon reveal that it would cost £250,000 to buy a lifetime guaranteed income to match the current state pension payout.

The full new state pension provides £221.30 a week.

Steven Cameron, pensions director at Aegon said that millions of pensioners reliant on their state pension will be anxious over the Labour Government’s warning of tough times ahead.

He said: “it’s not surprising that people are very reliant on the state pension to support their retirement living standards.

“Our own Second 50 research has shown for two years running that more than 95% of people expect to rely on it, to varying degrees.”

He pointed out that those who aren’t entitled to pension credit are seeing their winter fuel allowance withdrawn and there’s since been speculation that the state pension could be means tested in future.

Mr Cameron said: “The fact is that the state pension is worth a huge amount of money, and any suggestion that it might be means tested, so reduced or even removed for those with other retirement income above a given level, would send shockwaves through the pensioner community, impacting hugely on living standards for all but the truly wealthiest of wealthy.”

He said that based on current annuity rates, a couple would need half a million pounds to ‘buy’ their state pension privately. “And while this looks huge, it’s based on terms available today which are much better than they were a few years ago as annuities cost less when interest rates are high.”

He said that with expectations that interest rates are likely to fall back to lower levels in the coming years, the cost will likely rise, making the state pension even more valuable.

• The £250,000 cost calculation is based on what it would cost for someone in good health to buy an income equal to the state pension, paid monthly in advance and increasing in line with RPI inflation using the average of the top 3 annuity quotes from MoneyHelper on 30 August. Currently, the state pension increases in line with the triple lock which means it increases at the highest of inflation (CPI), earnings growth or 2.5%.