The public finance implications of both pensions and healthcare costs and the burden of increases dependency on future generations have been widely discussed. However the potential effect on equities of a shift from positive net cash flow into pension schemes to negative cash flows has received little attention.
Net cash flows into or out of pension funds seem to be sensitive to the return on equities.
If this return falls from its current levels, a gradual shift to negative cash flows is likely. This is more probable if the UK share prices fall in sympathy with falls in the USA, due to effects of the ageing population there.