Rapidly ageing population a financial time bomb

Ireland’s rapidly ageing population is leading to a financial time bomb, with warnings that no plan is in place to cope with the dramatic rise in those aged over 65.

Projections by the Central Statistics Office (CSO) show by 2021 the number of elderly people will have grown by 200,000 and there will be another 100,000 primary school children.

The yawning gap between the number of older and younger people will widen further by 2046, leading to warning over pension deficits, the need for greater nursing home provision, and increased education and healthcare costs.

According to the CSO projections, based on estimates of fertility and mortality rates:

*The population could reach 6.4m by 2046;

*The numbers over 65 will reach 1.4m by 2046;

*The number of children at primary school age will rise by up to 100,300 by 2021;

*The over-80s population will rise from 128,000 in 2011 to between 470,000 and 484,000 in 2046;

*By 2046 there could be up to 560,000 more older people than young.

Prof Alan Barrett of the ESRI said the amount of extra money that would be needed to bridge the funding deficit in the future was “hard to quantify” but “it is going to be very challenging”.

The Government has already changed the age at which people can claim the old age pension: next year it moves from 65 to 66 and in 2021 it will move to 67, before moving to 68 in 2028.

Prof Barrett said: “We are consumed with short term difficulties and have taken our eye off longer term issues.

“If you look at the period at the end of life we need nursing home care and we are really underdeveloped in that in Ireland.

“The health service is going to be under pressure. It is the increase in the ‘oldest’ old that is going to be most dramatic, the over 80s.”

Prof Barrett said the dwindling of the National Pension Reserve Fund to cover the banking crisis lessened our ability to guard against future funding deficits.

He said work practices needed to change to allow people work for longer, for older people to move back down the career ladder instead of simply being expected to retire, and for gap years for pensioners still at work.

Age Action spokesman Eamon Timmins welcomed the CSO figures but said “they will be pointless unless we are going to act on them”: “If older people are going to continue working for longer, we have to look at how they are going to do that and where they will be working. We also have to plan their ongoing health needs.”

Jerry Moriarty of the Irish Association of Pension Funds said options that could be considered included linking life expectancy to retirement age and an opt out system for private pensions.

Michael McGlynn of Nursing Homes Ireland said existing figures already indicated a “significant national deficit” of long-stay beds for older people who will need them and that demand for residential care is going to increase significantly in the next decade.

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