The Irish Fiscal Advisory Council (IFAC) on 15 July published its first Long-Term Sustainability Report, which assesses the sustainability of the State’s public finances for the period 2025-2050. The projections reflect population ageing and expected future economic growth.

The report warns that failure to increase the pension age as planned in 2021 would cost €575 million annually, with that figure rising over time, leaving the public finances on a vulnerable and unsustainable footing.

The report advises that the age should be pushed out to reflect increasing levels of life expectancy, and argues that ageing pressures mean the cost of maintaining existing services levels each year would “exceed the available fiscal space” by an average of €1.7 billion per year by the early 2030s.

“Given the scale of the challenges, a combination of measures is likely to be needed,” the report said, and suggested reducing benefits through indexing to prices (rather than wages), raising the retirement age, raising PRSI contributions, developing a second contributory pillar or encouraging more private pension saving. The full report can be read on the Irish Fiscal Advisory Council website.