Drastic action needs to be taken to ensure that the ageing population does not undermine the financial stability of traditional pension and healthcare systems, according to a report published by the World Economic Forum.

Klaus Schwab, executive chairman of the forum, said: “The ageing of our societies is one of the most profound challenges that the world is facing today. New solutions are required to afford adequate and accessible retirement and healthcare services for the world's ageing population in 2030 and beyond.” The United Nations forecasts that by 2050 one third of people in the developed world and one fifth of those in developing countries will be aged 60 or above.

The report presents three scenarios for state pensions and healthcare systems in the future:

1. The winners and the rest: in this scenario, healthy global economic growth delays the financial consequences of the demographic crisis. Despite the ageing populations, most governments are able to maintain scaled-back versions of existing social security systems. However, there is likely to be growing inequality and under-investment in the public sector, and many on low incomes will regard what is on offer as inadequate, the report said.

2. We are all in this together: in the second scenario, there is a concerted effort by leaders and politicans to rein in growing inequality and reassert the idea of collective responsibility for social services. In this scenario, growth is moderate, but returns on capital that are lower than expected are compensated for by an emphasis on finding innovative ways to manage the financial implications of the demographic shift, including family and community solutions, according to the report The future of pensions and healthcare in a rapidly ageing world.

3. You are on your own: in this scenario, economic recession causes problems for most state-funded pension and health systems. Healthcare and pension liabilities will be pushed on to individuals and the private sector with only minimal social security provision for the most needy.

To produce the report, the forum consulted more than 200 leaders, representing 60 financial institutions and healthcare providers and 40 non-business organisations, including ministries and academic institutions.

The report's authors, three from the forum and one from Mercer, the consultancy, then carried out two in-depth studies in China and Italy.

In a press release published by Mercer in reponse to the report, the consultancy forecast that increasingly it would fall to employers to look after employees' health and pension needs. Suggestions included rehiring retirees for busy periods and setting up wellness programmes targeted at mature workers.

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