The promises made to the elderly and the arm-twisting banner deals made by special interests i.e., union concessions, are simply impossible to pay. In the U.K. alone, the pension pledges are 3.5x their entire economy.
The world's most advanced economies, including Britain and the US, would be insolvent if they accounted properly for the pension and health pledges made to their aging populations, an authoritative report has warned.
•"Age-related liabilities dwarf short-term issues such as the cost of fiscal stimulus [in the recession]," the report added. It estimated that the undisclosed cost of age-related spending in the UK is roughly 3.5 times the size of the UK economy – or around £5 trillion.
•Christian Mumenthaler, chief marketing officer at Swiss Re and a co-author, said cultural changes would be necessary. People will have to work longer, pay more towards age-related care and receive less in old age. In the European Union, 16pc of the population is currently above 65. Within 40 years, it will be 28pc, he added.