Worldwide populations are ageing: today the number of people over 60 years old has surpassed 700 million worldwide, of which 64% live in less developed countries. By 2050 the older population is expected to have more than doubled to 1.6 billion and will exceed the young for the first time in history. Estimates predict that in 2050, 80% of this group of people over 60 years will be living in low-income countries. These countries usually do not offer old-age provisions for their oldest generation. Even at present times, one out of five extremely poor people (living on less than $1 a day) is aged over 60.
Old-age provisions in the form of micro-ensions are important for the poor to be able to safely accumulate, grow, and protect wealth. However, pension products which allow clients to successfully grow their net wealth to provide for their old age are rarely available to poor people. Pension-based old-age provisions are an underused policy instrument for achieving just and more equitable societies for all ages. Their vital role as part of anti poverty policy needs to be recognized.
Impact on poverty
A study by HelpAge International on the impact of non-contributory pension programmes on poverty shows that the programmes significantly reduce the probability that individual households with a pension recipient will be in poverty. Also, the evidence of this study suggests that extending non-contributory pensions programmes to other developing countries could have a significant impact on reducing poverty and vulnerability among households with older people.
Old-age provisions in the form of pensions are an effective way of reducing income poverty and other forms of poverty among older people. Regular cash transfers also increase poor older people’s access to services, particularly health care. As most older people live and share resources with younger family members, pensions have a substantial impact on child wellbeing, and contribute to increased school attendance and better nutrition among children. Old-age provisions based on pensions can play an important role in breaking intergenerational poverty cycles. Rather than creating dependency, pensions can actually reduce it.
 World Population Ageing 2009, Department of Economic and Social Affairs, Population Division, United Nations, New York, 2010.
 http://www.helpage.org/resources/ageing-data/, visited February 22nd, 2011.
 World Population Ageing 1950 – 2050, Department of Economic and Social Affairs, Population Division, United Nations, New York, 2001
 World Economic en Social Survey 2007 - Development in an Ageing World, Department of Economic and Social Affairs, United Nations, New York, 2007.
 Institute for Financial Management and Research, Centre for Insurance and Riskmanagement, http://www.ifmr.ac.in/cirm/socsec-intro.htm, visited September 21st, 2009.
 Non-contributory pensions and poverty prevention: A comparative study of Brazil and South Africa, Final Report, DFID Project R7897, Pensions and Poverty Prevention, HelpAge International, September 2003.