Record numbers of Epsom residents will celebrate their 65th birthday in 2012 thanks to the post-war baby boom.

The Department for Work and Pensions (DWP) said 1,800 people in Epsom and Ewell will hit the milestone age as the country celebrates the Olympics - 300 more than this year.

The figures for Mole Valley jump from 2,100 residents who start claiming their pensions in 2010, up to 2,400 in two years.

And the number of 65-year-olds in Reigate and Banstead will shoot up from 2,600 this year to 3,200 in 2012. The coalition Government fears the rise will put even greater strain on public finances, and it will encourage older workers to delay their retirement.

Pensions Minister Steve Webb said: “People are now living longer, healthier lives and most 65-year-olds can expect to live until their late 80s. State pensions need to reflect this and we need to make sure that the system is sustainable in the face of increasing longevity.

“We also want to make sure that where older workers want to keep working, they don’t find themselves pushed out of the workplace or experience age discrimination.”

The post-war spike in births in 1946 and 1947 has been blamed for the expected 150,000 rise in the number of 65-year-olds across the country by 2012.

The DWP said the first of the baby boomer generation started to draw their pension aged 60 in 2005, and its spending on people over working age has risen by nearly £14bn.

It said the cost will shoot up by another £4bn in the next two years.

The Government plans to bring forward its increase of the state pension age, and will encourage older people to continue working by phasing out the default retirement age. It will announce its decision later this autumn, and introduce the bill early next year.

It fears research that showed that many pensioners could expect to enjoy 20 years in retirement would cost too much public money.

The DWP predicted there will be 5.2m more people aged over 65 by 2030.