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BeeHive  >  BeeLines  >  2008  >  Sep  >  Saved by the 7th Cavalry?

Saved by the 7th Cavalry?

Is it possible that the Pension Crisis that we’ve all assumed we’re hurtling toward might be headed off at the pass in some bizarre cowboy film type way? "Who knows?" is where I am on the topic since reading a report that was published by the European Commission last week.

The report wasn’t about pensions as such, but was looking at the population trends around the European Union. (I wasn’t actually reading too much about pensions last week as I had a few days off to work in my garden and I took the chance to read different stuff for a change.) The prediction in this EC report for the UK is that our present population of 61.2 million people will have increased to 76.6 million by 2060. If that is how things pan out then it would likely make us the most populous nation of the current 27 European Union states in those far off days.

The predicted increases are down to two main contributory factors; the difference between birth rates and death rates; and immigration. The forecast is that up to 7.7 million people may have migrated to the UK by 2060 and that a further 7.69 million (almost the same number) will be added through births outnumbering deaths. That’s a projected rise in population of 15.4 million people most of whom, by definition, will surely be young tax payers (that’s my reading of it anyway). It seems to me that must help us with the demographic hiccup of so many baby-boomers hitting retirement in the next few decades and doing the awkward thing of living too long while they’re about it. It’s also likely that at least some of the retiring boomers will get bored just kicking around the traces and will continue to be economically active taxpayers way past their retire-by dates. So having read this report I didn’t feel too doom-and-gloom about things as I usually do when I read pension reports.

It looks as though things will be better for us here pension-wise than it will be for people in Germany, for example. The prediction there is that Germany will see the biggest population fall, down by 11.4 million to a total of just 70.7 million by 2060. That’s apparently mainly going to be due to a fall in the birth rate.

Some other stats from the report might interest you too. It’s likely that the population of the whole of the European Union will go up from 495.4 million right now in 2008 to something like 520.7 million by 2035, but then drop slowly to 505.7 million by 2060. But get this; the number of people over the age of 65 in the EU is predicted to go up from the present 84.6 million to 151.5 million in 2060. My calculator tells me that’s pretty close to 30% of all Europeans being over the age of 65 by then. But that’s not all. The number of people aged 80 and over is also predicted to be on the up and up with today’s number of 21.8 million likely to almost triple to 61.4 million in 2060. That’s over 12% of all Europeans by then being aged 80 or over. Can you imagine that? I mean, if that doesn’t lead to the notion of people becoming economically inactive in their late-fifties to mid-sixties in future being bonkers then I’m missing something. This has just got to mean that retirement ages across Europe can only go up in future hasn’t it? State pension ages, anyway.

That will surely lead many more people to get involved in private pension savings so that they can be in control of their finances and lifestyles while they wait for State-funded support to kick in once they reach old-age. As I said, one way and another I found it most interesting to read this report and it made things seem really positive to me for our industry. It was either that or soaking up the last of the summer sun in the garden…

1 September 2008

Source: Yahoo! News UK - 27 August 2008.

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