Future pensioners are safe

According to a new report by Think tank Tomorrow's Company, the Pensions crisis we are warned about, does not exist.

The report claims that incresaed productivity should enable the ageing population to support itself, as each worker generates more wealth, saves more and pays more taxes. Saving more is not the solution, as the decrease in spending would damage the economy.

The pensions deficict currently stands at an estimated £57 billion, leading to claims of a demographic timebomb, but accoring to one of the authors of the report, we can afford to grow old.

"As a society we can afford to grow old," he said. "Rising productivity will outweigh any negative influence on living standards from an ageing population."

The Tomorrow’s Company’s report uses the “economic support ratio” where the number of working people is compared to the number not working, unlike the Pensions Commission’s method which overlooks the nine million people who do not work although being of working age.

As can be expected, the conclusions that the two companies came to different conclusions. Tomorrow's Company predicted a drop of only 13% in the ratio of those under 65 and those over. The Pensions commission predicted a drop of as much as 47%, leading us to the conclusion that we're in trouble.

ven at the currently modest growth rate of 1.75 percent a year, productivity per head can be expected to double by 2045, on a macro scale - growing enough to generate the resources needed to ensure a decent living standard for every ageing UK citizen. But the government would be expected to create an environment where productivity can thrive.