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Immigration could pay for soaring costs of pensions
Published on: Thu, 29 Jun 2006 19:31:20 GMT
A huge upturn in immigration to the UK might be needed to stem the country's pensions crisis, a controversial new report claims today. Up to ten million migrant workers might need to enter the UK between now and 2025 to ensure pensioners can continue to receive the basic state pension, according to the study, published in the latest issue of the Economic Journal.
The forecast - one of the key findings of the study by Professors David Blake and Les Mayhew - is one of a number of possible solutions to the pensions problem, derived from a model of demographic projection developed at Cass Business School in London.
Due to increasing life expectancy and falling birth rates, there are not enough workers to support pensioners: in 1990, there was one pensioner for every four workers in the UK, but this is projected to climb to nearly two pensioners for every five workers by 2030.
Blake said the government's pensions white paper, published last month, would not go far enough to relieve "pensions pressure". It proposed an increase in the state retirement age and aims to encourage people to save more for their retirement via auto-enrolment in a national pensions savings scheme.
"All these things may need to occur - working longer, increases in migration and increases in contribution levels," added Blake.
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