Perfect storm: Ireland facing a looming 'pensions timebomb'

Tue, 24 Feb, 2026 - 06:00

Cianan Brennan

Ireland faces a looming "pensions timebomb", with the ratio of workers to over-65s set to more than halve by 2065 without policy reform, the Oireachtas housing committee will be warned on Tuesday.

Officials from the Department of Finance will tell the committee that the current demographics of four working people to every one pensioner will drop to less than 2:1 over the next 40 years from a perfect storm of falling birthrates, ageing population, and greater longevity.

The findings, contained in two reports by the department entitled Future Forty, suggest that demand for housing will increase from 50,000 units per year to 60,000 by 2030, “an assumption based on government policy”.

Kevin Daly, a principal officer in the department’s strategic economic development unit, is expected to tell the committee that the population of the country under Future Forty’s central modelling scenario will be 6.8m by 2065, up from 5.4m currently, with a far greater proportion of people above retirement age than is currently the case.

That in itself will “reshape Ireland’s labour force and increase demand for age-related services”, Mr Daly will say, noting that a higher fertility rate or greater levels of migration “would ease pressures but only marginally”.

Housing supply and fertility rates

If housing supply “rises as required” and population growth moderates, then the “imbalance” of housing supply and demand will “narrow in time”.

He will explain that Future Forty represents predictions based on a situation where policies do not change and it is not a prediction, but rather a “tool ... to prepare for the future”.

Key to the issue of demographic change is Ireland’s declining fertility rate, which has fallen from nearly three children per woman 60 years ago to 1.6 in 2022. A fertility rate of 2.1 is considered necessary to keep a population stable.

The drop in fertility rates is not unique to Ireland, but is mirrored in developed nations worldwide. A reversal in the trend is considered absolutely unlikely, meaning other methods — chiefly migration — will be needed to redress the imbalance in age profiles around the globe, the committee will hear.

Regarding the issue of rural depopulation, the committee will be told that rural areas can only be seen as a “credible proposition as a place to live” if there is a diverse range of employment opportunities either within the region or within a reasonable commuting distance.

Fearghal Reidy, the chief executive of Kerry County Council, is expected to tell the committee that the actions of local authorities via development plans are designed to, if not reverse rural decline, then at least slow it.

He will say that local authorities “do not directly control” many of the factors necessary to achieve that aim, including the construction of housing and the availability of utilities such as wastewater infrastructure, and are thus dependent on agencies such as the Department of Transport and Uisce Éireann.

Mr Reidy will say that, while local development plans can aim to rebalance negative changes such as rural depopulation, they can only achieve that aim via the co-operation of those external stakeholders.