Old age pensioner T.C. Aitchison has stated in a letter in today's newspaper that this year's Budget is no sweetheart for senior citizens and he is right.

The challenges facing Bermuda's elderly population are many and as time goes on, they are likely to get worse as the number and proportion of people over the age of 65 grows.

The bottom line is that the Government pension paid for out of social insurance was never going to be adequate to cover all of a senior citizen's needs.

So some six or seven years ago, the Government made it mandatory for employers to introduce mandatory pension schemes and to ensure that all of their Bermudian staff were on board.

While this was fine for people in their 20s or 30s who have most of their working careers to save, it was less satisfactory for people nearing retirement who would have little time to obtain an adequate pension.

That problem has worsened with the decline in the stock markets, which has eaten into the pension savings of all people, but is a particular problem for people who are either close to or have reached retirement age. The challenge they face is that if they retire now, they will have to take a private pension that is as manifestly inadequate as their Government pension. Even when the two are combined it does not constitute a living income if the retiree has no other resources.

Given the high cost of food, accommodation and especially health insurance, the plight of many senior citizens could not be plainer.

At the same time, there is the supreme irony that Bermuda is desperate for skilled workers of any age, but many businesses force employees to retire at the age of 65. In the last Throne Speech, Government proposed allowing people over that age of 65 to continue to work if they chose to do so. That has not happened yet, although there is still time.

That would, for some pensioners, alleviate their financial burden. But those who are unable or unwilling to continue to work still face major challenges.

In terms of incomes, the answer is to do something to improve pensions now. Mr. Aitchison notes the Government's strange obsession with unemployment insurance - in a country with full employment - while pensions are being increased by just three percent, which was the equivalent of the rate of inflation in January and in real terms, is the equivalent of $9.44 a week for most seniors.

Politicians spend a lot of time lauding the achievements of senior citizens, usually along the lines of "you built this great Country that we are lucky enough to live in today", but they rarely back words with actions.

The action that should be taken is to put in place a schedule of meaningful pension increases aimed at bringing pensions up to a reasonable level within the next five years.

This has to be paid for, of course. First, contributions to social insurance should be raised by working people, both to top up existing pensions and to ensure the scheme is solvent into the future. That will not be enough, and as Finance Minister Eugene Cox failed to do in this year's Budget, money raised from raising taxes on tobacco and alcohol should be added directly to the social insurance fund.