By Julian Knight
BBC News Personal Finance Reporter
Take a walk down one of Britain's streets in 20, 30 or 50 years' time and you will notice a big change in the faces of the people around you.
There will be far fewer young people on the streets, as Britain would have gone grey.
This is because as a population we are living longer and having fewer children.
"There is a double whammy effect taking place," Tony Leandro, secretary of Continuous Mortality Investigation (CMI), which calculates life expectancy, told BBC News.
"Birth rates are falling - but we are living longer due to improved diet, higher incomes, medical advances and better standards of education, allowing people to better gauge what diet and behaviour is good for their health," he added.
Living longer, though, poses profound challenges for retirement provision and the world of work.
The bottom line is that longer life expectancy may mean spending more time at work.
"The concept that you will be able to spend the first 21 years of your life in education then the last three or four decades with your feet up will be unsustainable in future," said Alison O'Connell, director of the Pensions Policy Institute.
"The simple truth is there will be fewer younger people around to pay for the pensions of the retired," she added. "We are going to have to find ways to extend peoples' working lives."
How Britain foots the bill for future retirement is the subject of a major report, to be issued by the government's Pensions Commission on 30 November.
Recently, the amount of time we are expected to live has shot up.
In 1997, the CMI's research suggested that by 2005 a 65 year old man could expect to live, on average, until he was 83 years and one month.
But in October life-span estimates were raised and the same man can now look forward to living rather longer - a further three and half years until he is 86 years and seven months old.
And if things go on as they are, a man who is 65 in the year 2015 may well live until he is 89 years and 10 months.
A similar pattern emerges for women, with female life expectancy expected to top 90 imminently.
However, while female life expectancy will remain a few years higher than males' the traditional gender gap - which saw women live about 4 or 5 years longer then men - is set to narrow a little in the coming decades.
Whatever way you cut it, though, by 2050 the proportion of the UK population over 60 should have risen from a little over 20% to nearly 30%.
The UK is far from alone in going grey.
Across the globe, people living longer and having fewer children will shift the demographic landscape.
France and Germany will see the proportion of over-60s rise to 33% and 35% respectively.
Even relatively "young" countries like Australia and Indonesia will see their populations grow much older over the next few decades.
As for China, the emerging powerhouse of the world economy, state population control measures and increased longevity will mean 30% of population being made up of the over-60s.
Although it is an international problem, it is up to each nation to work out how it will organise its pension and work system to pay for future pensions.
The French government has been trying to get its workers to accept a later retirement age.
In Australia and New Zealand, they have chosen to encourage or compel greater private savings.
In the UK, the government's pension commission, headed by Lord Turner, is looking at a number of policy options.
In its interim report, published last year, the commission outlined options to tackle what has been dubbed the pensions crisis.
The commission said that either future pensioners would get poorer relative to the working population or some tough decisions would have to be made.
The options include:
- Taxes would have to rise to pay for a more generous state pension
- People will have to be encouraged or forced to save more
- People will have to work for longer, perhaps beyond age 65.
The commission will recommend what should be done on 30 November.
Pension age rise
Recent reports have suggested that the commission will recommend an increase in the state pension age from 65 to 67.
Relatively few people work into their mid or late sixties
This would help pay for a more generous state pension, with increases linked to average earnings rather than prices.
But it does not automatically follow that raising the state retirement age will mean that people work longer.
"At present, few people actually work up to the state pension age," Patrick Gratton, chief executive of the third age employment network, told BBC News.
"Instead, they leave the workplace in their early sixties or before that if they have public sector jobs.
"Some go voluntarily because they have had enough. However, many others leave due to ill health or are made redundant and can't find another job."
Between 1973 and 1995, employment rates amongst over-50s men slumped from 89% to 62% as the economy moved from "older" manufacturing industry to "younger" services.
"Things have improved a little from the mid-90s nadir but too many bosses still see older workers as being less productive, ill more often and difficult to train," Mr Gratton said.
"This attitude must change if we are going to get people working longer and ultimately solve the pension problem."
Next year new laws come into force, making it illegal to discriminate against someone on the grounds of age.
However, employers will still be allowed to dictate that their employees retire by the age of 65.
"If we want retirement to be more of a process rather than an event then we have to get rid of the right of employers to force workers out of the door at 65. It sends out the wrong signal," Mr Gratton said.
"And this is compounded by the government's recent decision to keep the pension age for state workers at 60.
"In effect, this means that we now have a two-tier workforce, people in the private sector with unsound pensions financing gilt-edged public sector pensions."