Japan, notoriously, has relied on personal saving and capital growth in the stock market to support the elderly, This regime has failed and there is limited provision in place in the state sector. Elsewhere, the situation is frequently difficult. The figure shows the situation for a range of countries. One would not wish to grow old without personal savings in Austria. The consequences of all of these forces are summarised in Figure 5, which shows net changes in tax based on current commitments to fund dependency, with and without the impact of demographic change.
Demographic change has a major impact on the welfare bill.
The assumption in the figure is that increased outlay is met by equivalent tax rises. The scale of what is in train is evident. The implications to other forms of state spending is discussed elsewhere . The political consequences of an ageing population. Some nations as with Austria, above may face major political upheaval, populism and shrill complaint.