With fewer Japanese having children, the ratio of elderly people in the population climbed 0.5 percent last year with 24.88 million people out of 127.69 million people aged 65 or older, a government study said.

Japanese who are aged 90 or older totalled 1.016 million, climbing above the one million mark for the first time, said the Cabinet Office white paper on an aging society.

It said the number of elderly people will continue to "rapidly increase" through 2020 before stabilising.

"But an expected fall in the population as a whole will result in a rising ratio of elderly who will account for 26.0 percent of the population in 2015 and 35.7 percent of the population in 2050," the white paper said.

The general Japanese population is expected to peak out next year, with the birth rate hitting a new record low in 2004.

With an anticipated decline in the number of young workers, the study called for better employment opportunities for the elderly. Workers usually begin to retire at age 60 in Japan.

"As we brace for a full-fledged declining population, Japan must build a society in which the elderly can become active participants and fully use their abilities and experiences to maintain the vitality of the country," it said.

"Regardless of age, elders and other workers must be able to exercise their abilities through employment and receive fair treatment," it said.

Japan last year began to reform its creaking pension system to cope with the baby bust.

The white paper found that the graying population was taking a major toll on public finances.

In 2002, the social welfare system paid out 83.57 trillion yen (775.2 billion dollars), accounting for 23.0 percent of the national income.

The cost accounted for only 5.8 percent of national income in 1970, the white paper said.