Understanding annuitisation

Ageing is now a well-documented field. The forthcoming burden on pay as you go (PAYG) pension schemes has been the topic of an increasing number of papers, books and studies. In most developed countries, people will have to work more - there will be a need for incentives to increase the work supply - and/or the pension schemes will have to decrease their replacement rate. If not, there will be huge insolvency risks for PAYG pension schemes and the contribution rates will have to increase