Today's children will represent over a quarter of the population as old age pensioners, a new study commissioned by the Department of Social, Community and Family Affairs forecast.

The study, carried out by the Irish Pensions Trust, will be used by the Pensions Board to devise a national policy on social welfare pensions.

In contrast to last year, when those over 65 represented only 11 per cent of the population, in 59 years time that group will represent 27 per cent.

When launching the report yesterday, the Minister for Social, Community and Family Affairs, Mr Ahern, said a balance had to be struck between the provision of pensions and affordability and the longer term perspective was important for planning.

The report analyses population and economic trends from 1996 to 2056, when present six-year-olds will qualify for the old age pension.

"While the funding position is reasonably stable for the next 20 years, the position thereafter, when a large increase in the number of older people is projected, cannot and should not be ignored," Mr Ahern said.

Based on Central Statistic Office figures and taking into account the 1996 Census, the report assumes that Ireland has entered an era of prosperity which will continue in the long term, and that Gross National Product (GNP) will continue to increase by 5 per cent for the next nine years.

Population numbers will be about the same in 59 years, but the numbers of over 65s will have increased 2.5 times, from 414,000 to over 1 million. The working population (age 20-64) will decrease by about 100,000, from 2 million today to 1.9 million.

Zero net migration and unemployment reduced to 6 per cent by 2007 from the present 10.7 per cent will mean that there will be more people to support those over 65 and under 20 until 2006.

The State's population will increase from 3.6 million today until 2036, when it will peak at 4.07 million, and decline to 3.7 million over the next 20 years.

On an analysis of pensions changes between 1992 and 1997, the study shows that pensions increased at a faster rate than the Consumer Price Index, but less than the rate of increase of average earnings.