Aging populations could lead to intense pressure on the public finances and sovereign ratings five of the world’s leading developed countries, warns a new report from Standard & Poor’s.

The report covers Italy, Germany, France, the United Kingdom, and the United States.

Without changes in their current fiscal stance and policies governing age-related spending, sovereign ratings could begin to fall from their current levels early in the next decade, the ratings agency says. By the 2020s, the downward pressure on ratings would greatly accelerate, and by the late-2030s, all but Italy would drop below the investment grade divide.

“Without further adjustment either to the current fiscal stance or to social security and health care costs, the general government debt-to-GDP ratios of France, Germany, and the U.S. will surpass the 200% of GDP mark by the middle of the current century,” said Standard & Poor’s credit analyst Moritz Kraemer. “This will result in deficits that will be more akin to those currently associated with speculative-grade sovereigns.”

This scenario is not a prediction by Standard & Poor’s. It is a simulation that highlights the importance of age-related spending trends as a factor in the evolution of sovereign creditworthiness. In reality, it is highly unlikely that governments will allow debt and deficit burdens to spiral out of control, it notes.

Aging is only one force jeopardizing long-term fiscal solvency, S&P adds. Weak fiscal starting positions are just as important. If the governments examined were to start with balanced budgets in 2005, their debt ratios by 2050 would on average only be about one-half as large as under the scenario described above, even with no further reform aimed at squeezing age-related outlays, S&P notes. “This forcefully underlines the need to embark on a prudent fiscal stance as early as possible to be able to better absorb the surge of entitlements ahead,” said Kraemer. “Although attempts to reform pensions and health care systems are welcome, their positive effects are diluted by the nonchalant attitude among governments with regard to fiscal consolidation here and now.”