Brian Cowen (Laois-Offaly, Fianna Fail)

Clearly, the demographics will change in coming decades. Some years ago we made assumptions based on certain population changes which did not prove correct. The assumptions may be robust in the short term but the further ahead one predicts, the lower the certainty of accuracy. The demographics ratio between those of working age and pensioners will obviously deteriorate, from 4:1 at present to predictions of 2:1 in 30 years time, if the population of people of a certain age does not expand. We have to be somewhat circumspect, while in no way denying the importance of the issue.

Improving one's pension provisions requires deferring present income to future consumption. That is an important aspect because the reason one should have a good pension is for the better chance it offers of spreading consumption over one's lifetime in a way that continues to contribute to demand and revenue. While everyone agrees with the objectives of pension policy, reaching agreement on the means of meeting them, which often requires the deferral of prospective income in the short term for a longer term consumption pattern, is the problem. It is difficult to sell the idea of waiting for a rainy day because it is human instinct to believe one will not be around by then. However, that does not detract from the validity of the argument.

Deputy O'Donnell noted that few people on low incomes have supplementary pensions, the simple reason for which is they do not have the disposable income which would allow them to consider the option.

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