Ageing, longevity risk and following pension reforms are expected to have large impacts
on households’ saving level, and their need/demand for financial instruments. Evidence shows that the share of the insurance products and private pension funds in the household financial portfolio increased rapidly, despite the large differences between various developed and emerging countries. Private and public pension funds’ financial assets are growing rapidly,which requires governments to provide with a deep and liquid financial environment to ease pension funds’ asset and liability management problems. In our paper therefore, we are examining the role of governments in offering innovative financial instruments to meet the needs of an ageing population.