The Federal Government is coming under pressure to make changes to the age pension, as a growing number of baby boomers are expected to leave the workforce over the next decade.

Key points: The Federal Government is reviewing the deeming rate used to calculate how much income pensioners are earning from assets

The Federal Government is reviewing the deeming rate used to calculate how much income pensioners are earning from assets By 2029, it is predicted the government will be required to spend an additional $9 billion on the age pension

By 2029, it is predicted the government will be required to spend an additional $9 billion on the age pension Economist Chris Richardson says the pension age should be lifted and the family home should be means tested

Analysis by the Parliamentary Budget Office (PBO) predicts an ageing population will require an increase in government spending of $16 billion by 2029.

More than $9 billion of that will be on the age pension.

"The age pension is eminently affordable, but we can and we should do stuff better," Deloitte Access Economics' Chris Richardson told 7.30.

Mr Richardson said the PBO analysis strengthened the case for further raising the pension age, which is currently at 66 years. In 2023 it will become 67 years.

"If we're going to live a lot longer, well, chances are we're going to have to work a bit longer to pay for the bits when we're not working," he said.

Photographer Roger Arnaud, 64, thinks raising the pension age is a terrible idea.

He is finding it hard to get full-time employment, does not have a lot of superannuation and is planning to take the pension as soon as possible.

"I actually believe that it would be a lot better if the Government actually lowered the pension age," he said.

"There's a lot of people who've moved to over 60 and they're never going to find work again."

Roger Arnaud hopes to get the pension as soon as possible. ( ABC News: Chris Gillette )

Review of 'deeming rate' used to calculate pension

With record low interest rates there is pressure to widen pension eligibility by easing the means test.

The Government is reviewing the so-called deeming rate used to calculate how much income pensioners are earning from their assets.

This deeming rate has not changed in more than four years.

"Should they reduce it? I think they should," Gold Coast pensioner Julie-Anne James said.

"Given that we've got a 1 per cent interest rate with the Reserve Bank at the moment, no-one is earning big money on their cash in the bank."

Julie-Anne James says she knows many women who do not have a lot of super. ( ABC News: Chris Gillette )

Ms James does not have a lot of super and she knows many women in a similar situation.

"We just survive. We earned lower super, lower wages," she said.

The pension helps her live an independent life, and she is looking forward to helping care for her grandchildren.

"I don't think all of us do live the life we want to live. We don't have a choice, it is what it is."

Wendy Walters says she only has enough super to live on for about six years. ( ABC News: Chris Gillette )

Bundaberg retiree Wendy Walters worked in the community care sector and now has a relatively small superannuation nest egg.

She has just been granted the age pension.

"I think I worked out I've probably got six years [in super funds] and I'm certainly not going to be gone in six years, I can tell you that. I don't intend to," she said.

"If there wasn't the pension, I wouldn't be living. That's the reality.

"I always knew that I was probably in a situation where I would never be able to live terribly well. Having said that, one of the great things about my generation is that we do OK with very little."

Should the family home be means tested?

Mr Richardson says there is no case for reducing the Australian age pension.

"Our pensions are not generous. You look at our wages and our pensions, and that rate in Australia is not terribly high compared to what's paid elsewhere in the world," he said.

Economist Chris Richardson thinks the family home should be means tested. ( ABC News )

But there is a case, he argues, for including the family home in the means testing for age pension eligibility.

"The politics are horrendous, but it is still the right thing to do," he said.

"You have some people who have incredibly valuable homes and yet qualify for the pension."

The idea horrifies Ms James, who is still paying off the mortgage on her Gold Coast apartment.

"My home doesn't generate an income so I don't see it as being an asset … because I pay body corporate [fees], I pay a lot of bills to live here."

Mr Richardson says pension reform is a hard conversation for politicians, but it is possible to have a sensible debate.

"The basic recipe is simple: concentrate on those who need the most help."