Biscuitman

Just found the site I got some of the figures for my pensions leaflet from:-

http://www.cass.city.ac.uk/media/sto...816_43477.html

10 million migrants needed by 2025 to halt pensions crisis
New research from the Pensions and Risk Institutes at Cass

Monday, 1 November, 2004

Up to 10 million migrant workers might need to enter the UK between now and 2025 in order to ensure that pensioners can continue to receive £80 a week from the basic state pension, new research shows.

This could be the only way that pensioners can expect to receive their current level of pension if we continue to retire at the same age, we fail to increase national insurance contributions, productivity levels remain static and we continue to live longer. Under this scenario it would not be possible to raise the real value of the state pension for the foreseeable future. The UK population would grow considerably and furthermore, after 2025 there would be a national insurance contribution shortfall again.

This forecast is one of number of scenarios facing the UK which has been worked out using advanced mathematical models developed for the first time by researchers at Cass Business School, City of London.

The essential problem facing the UK is that there are not enough workers to support pensioners because we are living longer and birth rates have fallen. In 1990 there was one pensioner in the UK for every four workers. By 2030 there is projected to be nearly two pensioners for every five workers.

As laid out in the first Pension Commission report on 12 October, there are only so many ways to support pension schemes. These are: higher contributions, working longer and a greater working population. If productivity remains static, the UK will have to rely on migrant workers to feed that state pension pot.

Another scenario put forward by the researchers found that if the economy is well managed, and there is real growth at the historical rate of 2.1% per annum, and there are no other changes in variables (i.e. the population grows at the rate forecast by the Government Actuary) then the state pension will be able to increase in real terms at 1.5 percent per annum up until 2020. After this point the contribution shortfall continues to rise again and state pension age would have to increase beyond 65.

Primary Researcher and Director of the Risk Institute at Cass, Professor Les Mayhew, says in each of the scenarios modelled, the pension contribution shortfalls became increasingly difficult to manage after 2020 regardless of which scenario was used”.

“The UK is facing some tough decisions in terms of state pension provision. We can increase our work force via migration, we can work longer or we can increase contribution payments – even if we do this it only keeps the current state pension system stable until 2030”.

Co-researcher, Professor David Blake, Director of the Pensions Institute at Cass, adds: “The only other option is to combine these factors – work longer, increase migration and increase contribution levels. Expecting everybody to work longer may be unrealistic as activity rates among the over 50s have hardly changed in 25 years, and to make any difference there would have to be a significant change in working habits”

An ageing society which is also declining in numbers because its birth rate is too low faces stark choices if it is going to have a credible and viable pay-as-you-go state pension policy. Credible pension policies have to be time consistent, and time consistent policies cannot pass the buck to future generations (i.e., they have to exhibit intergenerational fairness). This implies that the ratio of a society’s pension bill to its wage bill cannot increase systematically. If the next generation is smaller in number than the current generation, the current generation has to:

accept a cut in its real pensions (either relative to prices or to wages) or
contribute more whilst in work or
work harder or
work longer and retire later or
accept more immigration.
Dowload a copy of ‘Immigration or bust: Securing the future viability of the basic state pension’ by David Blake and Les Mayhew is available on request.

Visit the Risk Institute website

Visit the Pensions Institute website

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IF THE EU WAS THE ANSWER, IT MUST HAVE BEEN A STUPID QUESTION!

Anthony Butcher

They missed one; leaving the EU and using the Independence Dividend.

Paul Birch

That still means increased contributions to the pension scheme (even if the increase to taxpayers is offset by other savings).

What they do appear to have missed is that higher compulsory NI contributions will also have the damaging effect of tending to discourage people from working (reducing the NI income base) or having children (reducing the working population base). Raising taxes reduces long term net revenues.

Percy the Poodle

The whole immigration point is ridiculous.
What happens when all these immigrants get old and start having fewer children too - the pensions crisis intensifies.

We cannot sacrifice our whole standard of living just to provide pensions. People must work longer if they are going to live longer or save more of their income while they are in work. These aren't political policies they are facts. Deeply unpopular ones at that. The only other way is to tax more which will slow down the economy to the extent that it will be counter productive.

Freeing us from EU economic constraints and our own could allow the economy to expand to an extent but not enough to provide employment for 10million immigrants every 20yrs.