Financially they are in good shape. This state looks after them. But will future generations be so lucky?

Japan is facing a demographic time bomb.

Birth rate falling

The latest government figures reveal the birth rate has fallen to the lowest level ever recorded.

Who will provide for the old of tomorrow?

But what is even more alarming is that the country has the fastest ageing population in the industrialised world.

The over 65s are expected to account for more than one in four people by early next century.

In Japan, as in the UK, pensioners are living off money that workers are currently paying into their pensions.

Ageing population

Today's Japanese pensioners reflect on their finances

Projections show that in the UK and America the number of retired people compared to the number available to work is rising, but the trend is happening much faster in Japan.

Economists doubt whether Japan will have the money to support its ageing population.

The future looks bleak for today's workforce

While the country has been investing much more of its wealth than countries in the west, the return on that investment - its economic growth - has been much smaller.

Complacency warning

Economics Consultant Andrew Smithers says people should not be complacent.

"When people prepare for retirement in either funded schemes from the corporations or even to some extent in state schemes, they make assumptions on how much the return will be on their investments.

"In Japan those assumptions are being proved to be too high."

Sixty-year-old retired manager Fumio Hotani now receives a company and state pension worth around £20,000 a year.

Pensioners need to learn financial self-defence

He is comfortably off but worries whether the state will be able to meet its pensions obligations.

He says people need to learn to look out for themselves.

"When we become pensioners the companies we have worked for should actively encourage us to know how to invest our pension and retiring allowances.

Businessmen in Tokyo are anxious about what the future holds for pensions

"We must have the sense of self-defence and I think it's important to find a suitable private pension scheme and take part in it actively."

Meanwhile, with the economy faltering, it is Japan's 30 to 40-year-olds who are most fearful about their future.