People will retire later in life but it should be a choice, conference told
IT is inevitable that people will have to work longer rather than retiring in their mid-60s, a conference on the sustainability of the State pension was told.
But working longer should be a choice, the head of the Economic and Social Research Institute, Alan Barrett, said in a presentation.
Dr Barrett said that all the studies of the long-term sustainability of public pension systems show that spending on pensions as a percentage of gross domestic product (GDP) will rise in the coming years.
This is because there are set to be large increases in the older population.
He told the conference, organised by the Society of Actuaries, that some of the studies show large, but sustainable increases.
Other studies suggest that projected increases may not be sustainable and that the implied rates of increase in social insurance contributions that would be needed to sustain the system would be unacceptable to many.
Whether the spending increases are sustainable or not, it is clear that increases in labour participation at older ages will lower spending on pensions as a percentage of GDP.
He said there is an inevitability about extended working lives in the context of sustainability and that we need to start planning for this, both individually and as a society.
Meanwhile, consumers have become gloomy about savings, with political uncertainty getting the blame.
The savings index had its biggest drop in six months in April, as savers reacted to ongoing concern over the formation of the new Government.