Public revenues will face downward pressure given the declining share of the population paying income taxes. 7 Public expenditure will tend to rise given the demands on public pensions and the fact that many of the types of services that older people require are provided by the public sector directly. Insufficient savings to fund retirement?
We are becoming wealthier and, through compulsory superannuation and other means of saving, we have gradually been building up private savings to fund retirement. But if we retire  7  4  This relies on two reasonable assumptions. First, the fall in the labour-to-capital ratio is not completely offset in nominal terms by the increase in relative prices (wages vs returns to capital).