Tony Ward is chief executive of Clayton Euro Risk
A study published in a recent edition of medical journal The Lancet, which forecasts how life expectancy will change in England and Wales, predicts that people will live longer than current estimates. The new prediction is that life expectancy nationally will increase for men from 79.5 years in 2012 to 85.7 in 2030, and for women from 83.3 in 2012 to 87.6 in 2030.
Data provided by researchers at Imperial College London was used to develop statistical models using death records, including information on age, sex, and postcode, from 1981 to 2012 to forecast life expectancy at birth for 375 districts in England and Wales.
The study’s conclusion is perhaps not too surprising, but what struck me is how ill prepared we are as a nation to deal with this seismic shift in demographics.
The Office of Budget Responsibility (OBR) advised that Britain will need another £20bn dose of austerity in 2020 to bring public finances back to pre-recession levels over the next 50 years, because of the country’s aging population. The OBR’s long term outlook shows that even plans for £12bn of welfare cuts, a £30bn retrenchment in public services and £5bn raised from tax avoidance in this parliament will be insufficient to bring the national debt back to 20% of GDP by 2065.
That’s rather worrying. I think what we need is considerable intelligent planning for the future. The longevity benefits sector is already trying to come to terms with this new world order. Remember, when the very first state pensions were paid in 1909, life expectancy was just a few short years after retirement.
The issue harks back to last week’s blog in which I advised that the issues in the housing market were not related solely to lack of stock but also lack of the right type of housing. But that’s only part of what needs to be done.
In the UK there are now 11 million people over the age of 65. This means that for the first time in history, we are living in a country where there are more pensioners than under-16s.
As the population of older people continues to grow exponentially, year upon year we need to ensure that needs of our elderly can continue to be supported.