Britain’s Aging Population

In many countries around the world, the advent of modern medicine and lower fertility rates has led to an increase in life expectancy. This increase in life expectancy seems like a one-sided positive outcome of modernity, but longer life expectancy in many countries has been coupled by a dropping birth rate, leading to an unsustainable population balance. The negative impacts of this population imbalance are magnified in countries that rely heavily on a welfare system to provide for older populations. The gap in the number of working age citizens and number of people collecting on welfare after retirement or after is referred to as the dependency ratio. The wider this gap becomes, the larger the strain on the welfare system in a nation will be. A widening population gap in the UK is dangerous, as the number of people who collect welfare, and use the National Health Service (NHS), grows larger and older than ever before. The UK is not the only country where this will be a problem however. In many other countries, ‘developed’ and otherwise, the rising population age gap spells trouble for the future. Of course, issues related to a widening population gap do not come without some upsides or mitigating factors. In the end, the positive outcomes of these population trends cannot fully mediate the issues that come with them. For this reason, policy makers now and in the future must be prepared to put in place creative solutions that may be politically unfavourable.

In the United Kingdom, issues caused by a widening population age gap are mainly related to economic stability and healthcare. The number of people over the age of 65 already outnumbers the number of people under the age of 16. These demographic changes have been attributed to falling mortality and fertility rates— and similar trends extend across much of the developed world. This means that with widespread modern medicine available and with women having fewer children than ever before, people are living longer and less people are being born.

Much of the decline in fertility rates over the past 50 years is a result of increasing access to contraception and higher proportions of women in the workforce. These transformations are also related to changing social norms about family size. While it was acceptable or even normal to have 6 or more children 50 or more years ago, nowadays it is quite rare. This keeps the expectation of number of children lower and people could be more likely to want to stay within the societal norm and have fewer children.

Andrea Squatrito

Image courtesy of Andrea Squatrito, © 2006, some rights reserved.

Of course, lower fertility rates would spell the end for a population in the long run if mortality rates (especially infant mortality) were not also reduced. The advances in modern medicine going back just 60 years are indisputably remarkable and have caused infant mortality to be a very small number. In the UK in 2014 the figure was under 4 infant deaths per 1,000 live births. The lowering mortality rate has been significant in the changing nature of the UK’s population dynamics.

The biggest issues that the UK will face in regard to the age gap will depend on the efficiency of the NHS and the state pension amount. Currently the British taxpayer funds the NHS, and with longer living citizens, each person will be using the NHS for longer. In addition to this, there will be more people overall using the NHS as they grow older. The NHS has seen much strain and unrest over the last few years, with some of the worst issues being bed shortages and long waits for treatment; issues that can only be exacerbated by a widening age gap. It is estimated that in order to serve the growing elderly population, the NHS will need 17,000 more beds by the year 2020 in order to continue to function effectively. In a political climate where the NHS is constantly fighting for extra funding, a lack of beds in hospitals does not seem to be a problem that will be fixed anytime soon.

With regards to the UK State Pension Fund, the rise in number of pensioners in relation to the number of people in the workforce could mean the fund might run dry in the near future. This leads to the possibility of the State Pension Fund becoming an unsustainable option in as little as a generation. As of the new UK State Pension that was instituted in 2016, many younger people will end up receiving less than they would have under the old pension system when they retire. This will certainly help alleviate some concerns with the pension fund running dry, but does not fully address the scope of issues caused by the widening age gap.

The UK is not the only country with issues due to an aging population, nor is it by any means in the worst shape in this regard. Japan is the most obvious case study in population aging has over one-quarter of its population over the age of 65. Up until 2000, the responsibility to care for the elderly fell on the family. This eventually became unfavourable because of the lack of oversight of care. Elderly people were being neglected, because the government had no role in their treatment. Since then Japan has introduced a long term care insurance policy which draws on public and some individual funding to provide care for those aged 65 and over. Of course this policy is not without the same pitfalls in the coming years as the UK health and pension systems. With a lack of tax revenue as Japan’s population moves towards retirement, the Japanese system could be in trouble.

Italy joins Japan with over 20 per cent of the population over the age of 65. The UK, comparatively, has approximately 17 per cent of the population over the age of 65. The Italian government has tried to combat this by raising the retirement age by increments, hoping to make the retirement age for men and women approximately 68 and 63 respectively. These policy changes are intended to ease the present burden on their pension system and help keep Italians in the workforce for longer, mitigating some of the factors of an aging population.

The UK government has been looking into raising the pension age gradually as well, hoping that this would alleviate the stress on state pension funding. Currently, the pension age in Britain is 65 for men and 60-65 for women. This will be increased over the coming years to 68 for both genders. This has the potential to help the UK greatly, especially if it is supplemented with personal savings over the course of a citizen’s work life. This cannot be seen as a complete solution however, as this does nothing to help the rising number of people needing care. For this reason, the UK should look towards a mixture of the policies in Japan and Italy, and consider pensioners paying for some of their care out of pocket as in Japan, or shift the focus of funding in the NHS to preventative care. Shifting to preventative care is the most sustainable and most politically acceptable option, and will provide benefits for generations down the line.

Of course, pensioners and retirees also have a positive role to play in the economy. Longer life spans indicate longer time spent in the workforce and possibly more time to pay into health care or pension systems. Retired citizens also tend to be more active in society at large, filling many volunteer and civic roles in society not often filled by younger people for no pay. Elderly people may also contribute to bringing down the cost of childcare by helping with their grandkids or babysitting for neighbours and friends. It is hoped that these positive aspects of an aging population can help alleviate the challenges associated with it.

Among developed countries, the population of the UK is not nearly the oldest population, but it is certainly approaching a precarious position with regards to NHS funding and the state pension system. Lawmakers in Britain have started to recognise these issues, but serious and innovative changes must be made in the near future to avoid unnecessary strain on Britain’s economy.