Are Today’s Pensioners The Lucky Few?
Society is growing older as people live longer and enjoy extended periods of retirement. Those still working feel the effects as health care and other costs spiral and are paid for through taxation. But will such issues cause friction between pensioners and workers?
An ageing population
Demographics examine how the structure of the population changes and although it is a subject seldom in the limelight it has never been more important.
The population profile has changed in recent decades from one dominated by young people to one increasingly populated by older and elderly people.
The economy as a result is different and governments and politicians are mindful of the effects on how people live and work and even choose to die.
A number of other important shifts have also taken place: wages in many areas have fallen, private sector trade union membership has dropped, inequality within populations has risen, and interest rates have fallen to historic lows.
As a result change is everywhere and everything is in flux as the number of people in work relative to those retired or about to retire drops to worrisome levels.
The capacity of a shrinking workforce to pay for a rising and retired cohort of older people with associated medical, social care, housing and pension costs is in question.
And the consequences of such upheaval for a group of people more active than any previous generation have yet to be considered or calculated.
A changing environment
Such demographic swings are significant as they have the economic potential to affect inflation, interest rates and the inequality trends of recent decades.
Inflation may climb as additional demand is placed on service provision in health and other areas leading to increased taxation for those in work.
Interest rates may increase as employment levels rise to prompt a reversal of the low interest anomaly of recent years.
Equality may increase as full employment causes wages to surge as the economy expands and rewards greater numbers of people.
The extent of the changes depend on how older people adapt and whether or not they choose to work longer or retire to avail of their hard earned rewards.
They may, for instance, choose to extend their working life as the costs of longevity sting and sway decisions about whether or not to embrace retirement.
Government and its inclination to tackle a niche of vocal voters used to getting their own way will also play a role, as it mulls how to lift the age of retirement and reduce health and pension benefits.
But the greatest influence will be the slow burn of demographics as it works its way into the economy and our everyday lives.
SO, today’s pensioners are the lucky few, as the next generation will have to work for longer for less while picking up the bill.
