Raising the retirement age will exacerbate the recession, global economist Roger Nightingale told summit delegates. It will expand the workforce, leading to downward pressure on pay. It might also lead to an increase in the supply of goods and services, but decreased demand because workers are unable to afford what is produced.
But Nightingale said the retirement age needed to rise because three crucial elements had to be in balance to make pensions work:
• the percentage of salary contributed to a pension
• the percentage of salary expected to be paid out as a pension
• the ratio of employees' working life to retirement.
If these were not in balance, he said, employees would not have an adequate pension in retirement.