Japan's 'ice age' employment generation is at risk of poverty during retirement

Japan Times

07-05-2025

Japan's "employment ice age generation," now in their 40s to 50s, faces an increasing risk of being in poverty when they are older even if they fully receive basic pension benefits.
Due to low wages they tend to earn during their working years and protracted pension adjustments reflecting the country's demographic changes, many in the generation may end up relying on welfare benefits. Experts call for shoring up pension benefit levels and providing housing support for the generation.
The ice age generation refers to about 17 million people who entered the job market from around 1993 to 2004, when it was difficult to find jobs after Japan's asset bubble collapsed in the early 1990s, kicking off long-term stagnation.
The generation has many low-paid nonregular workers. Many in the generation also have short histories of participation in the kōsei nenkin pension system for corporate and government employees, which pays extra benefits that add to benefits under the kokumin nenkin basic pension program with universal coverage.
To many in the generation, the basic pension will be the key source of income after retirement.
The basic pension is paid in full if participants pay premiums for 40 years. The regular full amount in fiscal 2025 is set at ¥69,308 ($484) per month.
However, many people in the ice age generation have periods in which they did not pay premiums or were exempted from paying due to a lack of income.
The benefits they will receive will, therefore, be less than the full amount, likely leaving many struggling to make ends meet after retirement. This is feared to result in a sharp increase in welfare benefit recipients, placing a massive strain on public finances.
The total monthly amount of welfare benefits, including rent aid, is ¥130,580 for people between 65 and 74 living in Tokyo's 23 wards. Welfare benefit recipients are also entirely exempted from paying out-of-pocket costs for medical and elderly care services.
Those receiving pensions can be eligible for welfare benefits if their pension income falls short of the welfare benefit level.
"People without assets or relatives are likely to be protected" under the welfare benefit program, a Tokyo Metropolitan Government official said.
The welfare benefit level is regularly revised to reflect the consumer spending and inflation situations. But the basic pension level is adjusted in a way its growth is kept slower than inflation, causing the gap between the welfare and basic pension benefits to widen.
The basic pension adjustments are set to continue until fiscal 2057, when the ice age generation will be in their 70s and 80s, with the level expected to be about 30% lower than it is now.
To improve the situation, the government hoped to include a measure to bolster the basic pension program with funds from the financially robust kōsei nenkin program in the public pension reform legislation it plans to introduce during the current parliamentary session ending in June. This attempt has been abandoned, however, amid strong opposition within the ruling Liberal Democratic Party.
The government should consider steps to secure housing and support the livelihood of the ice age generation after paving the way for the basic pension boost, said Kohei Komamura, social policy professor at Keio University.
"If many in the ice age generation, which has a high unmarried rate, continue to live alone in their old age, they will be more likely to experience deteriorating health," Komamura said. "If we develop shared housing for the elderly with living support services and encourage them to live together, I think we'd be able to help reduce their living costs and prevent loneliness and poverty."