About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Monday, August 3rd, 4:53PM
rss
Latest Headlines

The demographic issue

The ageing of New Zealand's population is the reason there is a crisis in funding superannuation. Part 6 of our series on the history of super explores the demographic issues.

Monday, April 23rd 2001, 3:48PM

The issues dominating retirement income policy planning in New Zealand are the ageing population and its consequences for the ratio between pensioners and those in workforce age groups.

In common with other developed countries, New Zealand is experiencing a rise in the proportion of older people in the population - the result of a continuing rise in life expectancy and substantially lower birth rates than a generation ago.

Until recently the rise in life expectancy was mainly because of reduced death rates at younger ages. However, a rise in life expectancy at older ages has recently become apparent.

Life expectancy in New Zealand
   
1901-05
(non-Maori) 
1950-52
(all groups) 
1995-97
(all groups)
At birth 
Males
Females 
58.1
60.5
67.2
71.3 
74.3
79.6
At age 65 
Males
Females 
12.2
13.3
12.8
14.8
15.5
19.0
Sources: Yearbook 1928 page 144 and NZ Life Tables 1995-97 page 14.

A more dramatic consequence of lower death rates among the young and middle aged is the increased likelihood of their reaching older ages. At the beginning of the 20th century the Assistant Actuary of the then Government Life Department estimated that only 471 out of every 1,000 males, and 530 of every 1,000 females, born in New Zealand could be expected to survive until age 65 (Yearbook 1902 page 353). By 1995-97 the survival rate to age 65 for males was 804 per 1,000, and for females 873.

The long-term rise in the proportion of the elderly is expected to put increased pressure on retirement income and health systems. The increased costs of providing for the elderly are expected to be much higher than the cost reductions associated with a smaller proportion of children in the population. The major effect is expected in the first few decades of the 21st century, when the large "baby boom" generation will be retiring and there will be smaller numbers of younger and middle aged adults to replace them in the workforce.

Estimates of the speed and scope of this "demographic ageing" vary according to assumptions about future birth rates, life expectancy trends, and migration levels and patterns. The Government Statistician has published a series of population projections that include a range of assumptions such as low, medium and high assumptions for fertility and mortality, and annual net immigration ranging from zero to 20,000 per year. All projections show a substantial rise in the proportion of the elderly in the population.

One measure of demographic ageing is the proportion of the population aged 65-plus expected to be in New Zealand in the future. Here are the highest and lowest of the eight alternative projections of the Government Statistician, published in Key Statistics and on the Statistics New Zealand web site.

Projected share of the population aged 65-plus
year lowest projection highest projection
1996 (actual) 11.6 11.6
2001 11.6 11.7
2011 12.8  13.5 
2021 16.1 17.8
2031 20.0 22.9
2041 22.4 26.7
2051 23.1 28.3

The lowest projection shows the share of the population aged 65-plus approximately doubling by the middle of the 21st century. The highest projection shows the share rising to more than 2.7 times the 1996 proportions by the year 2071. All projections show the same basic pattern of a sharp rise in the proportion of older people and the ratio of the elderly to those in traditional workforce age groups.

The high fertility assumptions produce the smallest (but still very large) long run rise in the percentage of those aged 65-plus, and the low fertility assumptions the most extreme ageing pattern. The level of net immigration has a significant impact in the medium term, but less impact over the longer term because the migrants themselves age.

« Cullen on right track with superannuationAMP & Good Returns launch superannuation website »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Massey calls for Act overhaul
    “@tash if these "experts" understood or at least willing to listen to us, we will not be having this dialogue in the first...”
    3 days ago by w k
  • HSBC does it again
    “Apologies for the typo - the above should read "$1.020m for two years at 4.69%"...”
    3 days ago by Laurie
  • Obituary - Bob Edwards
    “I had the experience of working closely across the table from Bob as an AXA representative negotiating adviser terms with...”
    3 days ago by Ros Hogguer
  • HSBC does it again
    “Great rate - but it's important to point out that there is no cash contribution. Today I negotiated a $10,000 cash contribution...”
    4 days ago by Laurie
  • FMA takes action against Milford trader
    “Goodness me, if the FMA are going to prosecute for “trading that manipulates the closing price” and “trading conducted...”
    4 days ago by Brent Sheather
Subscribe Now

News and information about KiwiSaver

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 6.24 5.10 5.59 5.59
ANZ Special - 4.89 4.99 -
ASB Bank 6.50 ▼5.05 ▼5.25 ▼5.35
ASB Bank Special - ▼4.69 ▼4.89 ▼4.99
BankDirect 6.50 ▼5.05 ▼5.25 ▼5.35
BankDirect Special - ▼4.69 ▼4.89 ▼4.99
BNZ - Mortgage One 6.65 - - -
BNZ - Rapid Repay 6.24 - - -
BNZ - Special - - 4.69 -
BNZ - Std, FlyBuys 6.24 5.19 5.39 5.29
BNZ - TotalMoney 5.99 - - -
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 5.75 5.75 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
HBS Bank 6.14 5.39 5.39 5.39
HBS Special - 4.99 4.99 4.99
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.45 5.10 5.40 -
Housing NZ Corp 6.49 5.19 5.49 5.59
Lender Flt 1yr 2yr 3yr
HSBC Premier 6.60 4.89 4.89 ▼4.99
HSBC Premier LVR > 80% - - - -
HSBC Special - ▼4.49 ▼4.49 ▼4.49
ICBC 6.75 5.99 6.39 -
Kiwibank 6.15 5.39 5.49 5.69
Kiwibank - Capped - - - -
Kiwibank - Offset 6.40 - - -
Kiwibank Special - 5.09 4.99 5.39
Liberty - - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society 6.70 5.65 5.95 -
Lender Flt 1yr 2yr 3yr
NZ Home Loans 6.60 5.39 5.49 6.29
Perpetual Trust 7.70 - - -
Resimac 5.84 5.60 5.65 5.79
SBS Bank 6.14 5.39 5.39 5.39
SBS Bank Special - 4.99 4.99 4.99
Sovereign 6.35 ▼5.05 ▼5.25 ▼5.35
Sovereign Special - ▼4.69 ▼4.89 ▼4.99
The Co-operative Bank 6.20 4.89 4.99 5.20
TSB Bank ▼6.24 5.45 5.49 ▼5.40
TSB Special - - 4.99 5.40
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 6.15 5.39 5.39 5.59
Westpac - Capped rates - ▼6.15 ▼6.15 -
Westpac - Offset 6.15 - - -
Westpac Special - - ▼4.69 -
Median 6.45 5.19 5.39 5.39

Last updated: 31 July 2015 11:25am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com