1. ESIP Conference Luxembourg 29th November 2007 Effect of migration on planning and financing of Social Security Derek Coulthard International Pension Centre UK

2. ESIP Conference Luxembourg 29th November 2007 Social Security (Pensions) Is there actually a relationship between: Migration The Planning and Financing of Pensions In other words – to what extent does migration influence national pensions policy Lets us first examine the two concepts separately

3. ESIP Conference Luxembourg 29th November 2007 Migration UK immigration is small relative to some other countries: For example over the period 1990 – 2005: USA – 15 million immigrants Germany and Spain – 4 million immigrants UK – 1.5 million

4. ESIP Conference Luxembourg 29th November 2007 For the UK migration is a two way process 5.5 million UK nationals live abroad Present migration to the UK is essentially transient – people come to work for short periods Since 2004 some 600,000 workers have come from A8 countries – about half for short term and not to stay.

5. ESIP Conference Luxembourg 29th November 2007

8. Pensions Policy Challenges to present UK pension systems include: Inadequate savings Demographics Life expectancy

9. ESIP Conference Luxembourg 29th November 2007

12. Government proposals for reform include: Abolition of certain qualifying conditions 85% of those who benefit from this will be people overseas. Estimated: Extra International pensioners: 35, 000 in 2010 650,000 by 2025 1.3 million by 2050

13. ESIP Conference Luxembourg 29th November 2007 Government proposals for reform: Support and encouragement for longer working lives: State Pension age will be gradually raised by stages to 66 – 67 - 68 by 2050 Measures to support longer working Greater flexibility around deferral of claim to state pension

14. ESIP Conference Luxembourg 29th November 2007 Migration and Pensions UK Pensions Commission: Only high immigration can produce more than a trivial reduction in the projected dependency ratio over the next 50 years......but this would only be temporary........unless still higher levels continued in later years.........or immigrants maintained a higher birth rate than the existing population....since immigrants themselves grow old........

15. ESIP Conference Luxembourg 29th November 2007 Thank you for listening