THE world economy and most asset markets are buoyant. But for future generations of retirees, their strong performance is of scant comfort. The latest pension report from the OECD, a club of mostly rich countries, notes that whereas public spending on pensions in its member states has risen by about 1.5% of GDP since 2000, it is expected to slow substantially in the future. As the average age of these countries’ populations continues to rise, their governments will be hard-pressed to slow the growth in pension spending without squeezing the real value of benefits. In 2015, for every 100 people in OECD countries aged 20 to 64 years old, there were 28 who were 65 or older. By 2050, that ratio is expected to soar to 53.

Many OECD countries have passed reforms in recent years to reduce the generosity of both public and private mandatory pension schemes (those in which employees are forced to contribute). In Britain for example, the shift away from the more munificent “defined benefit” schemes has seen active membership of such open private sector schemes fall to 0.5m in 2016 from 1.4m ten years earlier. And in the past two years, one-third of the OECD’s members have changed required contribution levels, and three countries have raised their retirement ages. In about half of the club's states, men will work an extra 1.5 years and women an additional 2.1 years by 2060. Even so, this is no match for the expected increases in life expectancy. Moreover, the official retirement age is a loose guideline at best. Whereas workers in some countries, such as South Korea, continue to toil for over a decade beyond its statutory retirement age, those in Italy clock out four and a half years earlier on average. The cost of longer periods of retirement is that they will not be so richly enjoyed.

The net replacement rate—post-tax retirement income as a proportion of pre-retirement post-tax earnings—for full-career average earners is already dipping in many countries. Britain now sits at the bottom of the heap, with a replacement rate of just 29%, narrowly beating Mexico to this unenviable position. That is substantially lower than the OECD average of 63%. Pensioners in some European countries still garner generous benefits: those in France enjoy a 75% net replacement rate; those in the Netherlands expect over 100%. Such largesse is unlikely to last.