Absolutely a key concern and a far more expensive one than many of the short term issues making headlines at the moment. Taking into consideration the high numbers of people with no private pensions this is only going to get worse as time progresses if not addressed.Maintaining payments at current rates would require an increase in contributions of five percentage points from all workers, McKinsey states. The alternative would be to cut benefits by around 35 per cent across the board.
The pensions issue looked at from the level of society as a whole is not about saving for retirement.
If the dependancy ratio goes from 6 workers to 1 retiree now, to 2 workers to 1 retiree in 40 years time, it will make no difference what savings those retirees have. There may be a difference between retirees who have savings and those who do not, but the issue is the ratio of workers to retirees.
Only large scale capital formation and productivity increases are the only possible way 2 workers can support one retiree.
Maintaining payments at current rates would require an increase in contributions of five percentage points from all workers, McKinsey states. The alternative would be to cut benefits by around 35 per cent across the board.
Personally, I would like to see this topic become a key issue in the upcoming general election.
40 years ago when I started paying it, it was to cover retirement, what happened to my 40 years of money?
They took 2.5 billion from the pension fund for austerityBad news it has always been a pay as you go system, that is until the music stops!
Undoubtedly that's all true Steven but ultimately the electorate determines the agenda in a general election.
Collectively we can't continue ignoring this growing problem.
Mandatory pensions are the way to go. If people are told they have to join a scheme, they tend to do without much grumble. It's when they have a choice of spending or saving, they usually spend.
Steven
www.bluewaterfp.ie
Mandatory pensions are the way to go. If people are told they have to join a scheme, they tend to do without much grumble. It's when they have a choice of spending or saving, they usually spend.
Would we have the option to what the Germans are doing, bring in thousands of young foreign workers to compensate for our aging population.Sorry Steven but you simply do not understand the problem.
If every retiree in 2050 had saved and saved during their working lives and owned piles of assets when they came to retire, that would have no effect whatsoever on the fact that the dependency ratio will change from 1 retiree to 6 workers today to 1 retiree to 2 workers in forty years time.
Retired people can never take one third of the income produced by the working two thirds.
If every retiree in 2050 had saved and saved during their working lives and owned piles of assets when they came to retire, that would have no effect whatsoever on the fact that the dependency ratio will change from 1 retiree to 6 workers today to 1 retiree to 2 workers in forty years time.
As an aside, I do find it a bit odd that you have another thread on the go bemoaning the poor quality of postings on AAM these days and then you are this rude/patronising to a poster who does indeed understand pensions and the problems surrounding their provision. But I digress...Sorry Steven but you simply do not understand the problem.
It is correct that significant personal savings won't affect the dependency ratio but they will mitigate the impact of the changing dependency ratio - which is what is important. If people have significant assets saved, they can rely less on the state. Relying on the state for 1/6 of your post-retirement income rather than 1/2 of it equalizes the impact of a dependency ratio changing from 6:1 to 2:1.If every retiree in 2050 had saved and saved during their working lives and owned piles of assets when they came to retire, that would have no effect whatsoever on the fact that the dependency ratio will change from 1 retiree to 6 workers today to 1 retiree to 2 workers in forty years time.
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