ST. PETERSBURG, October 20. /TASS/. Russia spends on indexation of pensions annually about 350 billion rubles ($5.6 bln), which is equal to half the cost of higher education in the country, ex-Finance Minister and head of the Committee of Civil Initiatives Alexei Kudrin said on Tuesday.

He was speaking at the 14th All-Russian Forum "Strategic Planning in the Regions and Cities of Russia. The Space for Choice and Choice of Space".

"Every year, an increase in funding from the federal budget of this issue is half the total funding of higher education in the country. This is about 300-350 billion rubles a year at a deficit of the pension system due to changes in demographic situation and other factors, including inflation," Kudrin said, commenting the initiative to raise the retirement age to 63 years. Kudrin recalled that the government had decided to "freeze" the accumulative part of pensions in 2016.

"But only for one year. Then, in 2017, if pension savings are unfrozen, it would take 350 billion rubles and another 350 billion," Kudrin said, adding that "this is a huge financial problem."

Earlier, the Economic Development Minister Alexey Ulyukayev said that, in his opinion, the retirement age in Russia can be raised for both men and women to 63 years.

The Finance Ministry also advocated for raising the retirement age. The Ministry referred to a study by the Organization for Economic Co-operation and Development /OECD/ study which recommends Russia to raise the retirement age to 65 for men and women (now it is 55 years — for women and 60 — for men). The Finance Ministry said that the Russian economy has serious demographic problems and it needs manpower to ensure economic growth.