Living with Britain's population timebomb
100 years ago, there were five people working for every retired
person. Soon for every pensioner, there will be just one worker. But we have not
woken up to this social revolution as we grow older and healthier. Robin McKie
asks what this means for the future and how our lives will change
Sunday January 25, 2004
The following apology was printed in the Observer's For the record column, Sunday February 1 2004
In the article below we quoted Prof Raymond Tallis of Manchester University as saying 'the percentage of the elderly who are capable of independent life has risen from 20 to 35 per cent'. He actually said the proportion of people over 85 who are now dependent on others for help has fallen by about 25 to 35 per cent over the last two decades. Apologies.
It is 2060. The world's first septuagenarian mother has given birth, while in Britain, with its population of 100-year-olds approaching half a million, royal congratulations to centenarians have long been abandoned because the number of recipients threatens to overwhelm Buckingham Palace. The greetings card industry has never had it so good, while Saga magazine - now renamed Just Seventy - vastly outsells lads' magazines like Loaded and FHM.
It sounds the stuff of science fiction. But only just - for researchers now believe our nation has begun to fade to grey. Falling birth rates and rising life expectancy are turning Britain into a land of codgers.
An 'age-quake' is about to overwhelm us, a 'wrinkly' revolution that is set to transform society: singles' nights for pensioners at fitness clubs, workers in employment in their seventies, grandparents running houses for grown-up children who can no longer afford their own homes. The grey pound will be all powerful and society will bend before the will of the aged. The golden oldies are on the march.
Just consider the statistics. By 2050 one person in five in Britain will be over 70, a regiment of 12 million oldsters - double the current population of London - filling residential homes and sheltered housing across the land. In addition, there will be a further eight million aged between 60 and 70. For the first time, there are now more over-60-year-olds than under-16s in this country.
The consequences of this seismic shift in demographics will be profound. In the 1950s an employee lived, on average, only three or four years after retiring at 65. Today he or she will survive for decades, a trend that is now producing major shortfalls in company pension funds throughout the West, as the US Centre for Strategic and International Studies recently warned. 'Countries will have to to race against time to ensure their economic and social fabric against the shock of global ageing,' it stated.
It was a message repeated at the World Economic Forum in Davos last week. The world - both developed and developing - is facing an ageing bombshell, delegates were warned, and many nations are singularly ill-prepared. As Peter Heller, of the International Monetary Fund, pointed out, pensions in Britain were now woefully inadequate for the coming years.
Heller's warning was echoed at home by Tory politician Grahame Leon-Smith and Labour stalwart Terry Pattison when they launched the Senior Citizen Party, which has pledged to fight for better pensions for elderly people.
But if the elderly feel hard done by, so do the young. A hundred years ago, for every pensioner there were five people in employment. Today the figure is 2.5. In a few decades it will approach one. Each worker will have to support themselves and another - old - person. Instead of having a pyramid of support with a myriad workers at its base, each pensioner will rest upon one straining individual, a lonely column of dependency. Already problems are materialising. Middle-aged couples - already stuck with the spiralling costs of children - are having to pay more for their parents' care as they live longer and their pensions and savings fall short.
'In the past three years, the fees for my mother's residential home have risen from £1,200 a month to £1,600,' said Anne Findlay, of Wimbledon, London. 'At the same time her pension went up by a pittance. Some of that extra money now has to come from us. That is money we would have invested in our family's future, but now it has to be spent today. This is going to become a real problem.'
Such things put a strain on the best of families, as Jasper Carrott observed, when comparing people's relations with ageing relatives and children: 'They're both on drugs, they both detest us, and neither of them has a job.'
And things are only going to get worse, say experts. The Government has made it clear it wants to fix state pension spending at current levels, while occupational pensions - from employers - will continue to shrivel. Cash for our swelling ranks of oldies is going to become very scarce, although the bills will rise inexorably. The Royal Commission on Long Term Care estimates that the costs of caring for old people will increase from its 1995 level of £11 billion to more than £45 billion in 2051. The question is: who is going to pay?
The answer, made by some with increasing vehemence in recent weeks, is simple: immigration. Among the world's poorer nations, where 60-year-olds are rare, age profiles contrast starkly with those of the West. While the median age of Europeans is 37, that of Asians is 26 and of Africans a mere 18. These are continents filled with young blood to spare, men and women willing to leave their homelands to find a better life. Just look at what this process has done for America, argue analysts. During the boom years of the United States in the 1990s, more than 13.5 million people immigrated - most of them illegally - to the US, with most heading for California and Southern states. Without these individuals - mostly from Asia, Mexico and South America - America's young labour force would have shrunk by 20 per cent and its industrial growth would have stalled, says Paul Harrington, of Boston's Northeastern University. 'We would not have been able to fuel our economic expansion in the absence of foreign immigration,' he states.
It is a point that was acknowledged officially by President George Bush a few days ago when he announced he was giving a virtual amnesty to millions of these illegal workers. One motive was political, to woo Hispanic voters in an election year. There was another, more pragmatic reason. Most immigrants are young and many analysts claim their energy gives America the momentum it needs to keep itself industrially vibrant. This in turn helps to support the country's ever-swelling numbers of elderly folk.
The success of this approach can be seen in the statistics. In America, the world's richest nation, only 12.6 per cent of the population is over 65 - thanks mainly to its importing of young foreign workers. In Britain, the figure is 15.6 per cent, while most of our European partners have figures of over 17 per cent (as does Japan). What Europe needs is fresh blood, the argument runs.
The trouble is that America - for all its questionable race relations history - still appears more open to the idea of immigration than Britain, as the former Immigration Minister Barbara Roche pointed out last week at a Royal Geographical Society debate on the subject. While America runs Ellis Island as a shrine to the 'huddled masses' who sought shelter there, Britain has no equivalent museum or monument to the immigrants - from Sigmund Freud to Joseph Conrad - who have enriched our lives. 'This country desperately needs a full, considered debate on immigration, but there are no signs of it happening,' she says.
Nor is increased immigration - with its attendant risks of intense right-wing opposition - an answer on its own. The country's population would have to double in number to provide enough young foreign workers to support our pensioners, an unacceptable figure by any standard. And in any case, developing nations are also set to age like Britain, albeit a couple of decades after us.
The alternative is to introduce higher taxes to fund improved state pensions, a political anathema at present, or improved company pensions, a notion that few economists anticipate in the near future. One answer may therefore be to force men and women to work longer. Britain has already raised the state pension age for women from 60 to 65. Adding a few more years, for both sexes, may prove to be irresistible, as the Society of Pension Consultants has suggested. If people work on just an extra two or three years, the argument runs, they will be reducing the length of time their pension has to fund them while they will be paying taxes that go to the Treasury, which, of course, has to cough up for everyone's state provision.
It sounds a good argument. And for those who enjoy their work, it could prove to be a pleasant ruse. For those stuck in jobs they hate, it will seem less acceptable. They can't wait for that golden watch and their Dunworkin cottage in the country.
And there are other problems, as actuary Bryn Davies of Union Pension Services points out. 'We already have a significant number of people in the UK who give up work before they reach 65, so there is no evidence to suggest that delaying the official retirement age to something like 68 will help,' he said. 'All that will happen is that more people will be denied pension money for even longer and will need income support for longer. Either way, the Treasury will have to cough up.'
This point is backed by the House of Lords select committee on economic affairs, which this month published a report, The Economics of an Ageing Population, in which it lambasted the Government for its attitude to pensions. 'What is the point of a complex accounting system to track national insurance contributions over each person's working life so that they can qualify for a basic state pension which will need, under the Government's present policies, to be topped up by means-tested benefits for between a half and three quarters of all pensioners, most of them women?' asked one author, Lord Oakeshott of Seagrove Bay.
In the long term, no single solution is likely to be sufficient. We can expect to face a future not just of higher taxes but of an increased number of years at work and - for a while - higher numbers of immigrants reaching our shores.
Most people of a liberal sensibility will have little trouble with the latter two prospects. Right-wing newspapers are likely to react hysterically, however, which explains the Government's apparent reluctance to face the critical issues raised by our ageing population. It is not an option that it is likely to be able to maintain for much longer.
· Additional reporting by Ben Wilson
A total of 28 per cent of the workforce was over 50 and 35 per cent was under 30.
33 per cent of workers will be over 50 and only 28pc will be under 30.
Leisure and sport
The idea of spreading numbers of pensioners raises images of a nation clogged by hobbling, Zimmer-framed crones. In fact, the current generation of over-60s is the healthiest and most active on record. They already provide gyms and health clubs with substantial business and use facilities and equipment for far longer than younger fitness fanatics. Many clubs are now running special, relatively gentle classes in aerobics and activities to meet the needs of their elderly members, and some - such as LA Fitness - have even begun running OAP singles nights.
With their considerable financial power and the prospect of decades of healthy life ahead, those in their sixties and seventies have already begun to make an impact on our culture. Archaeology, studies of family trees, amateur astronomy, history and many other reflective activities have all received major boosts as more and more older people seek stimulation in retirement.
In future, each of us can expect to live longer and experience health that is more or less free of chronic illness. We will experience what doctors call 'compression of morbidity'. In other words, we will become older and older before enduring, on average, shorter periods of ill health before dying. At the same time, more medicine and treatment will be delivered at home as the health service attempts to cut costs. Reduction in smoking levels will enhance life expectancy, a trend that will be offset by increases in obesity.
Dealing with the nation's swelling numbers of pensioners represents the most obvious and awkward challenge of the grey revolution. By 2050, there will be far fewer young people around to provide the nation with its wealth. Those over 65 will either have to play an increased role in making goods and running services compared with today or individual productivity will have to rise among younger workers to maintain the nation's elderly. Until now, this latter process - improved productivity - has compensated the country for the fact that the average Briton is getting older and older. Whether this continues is a different matter.
How ageing begins
Pinpointing the time that we start to age is a straightforward business, say scientists. It begins in the womb. There our cells divide, grow and begin to accumulate the DNA damage that will eventually lead to our deaths. Essentially it is downhill from the word go.
'It was once thought that humans are programmed to die,' says Prof Tom Kirkwood, of Newcastle University. 'But this is not the case, we now realise. Even in the last few minutes of life, a cell's repair mechanisms struggles to do its work.'
In some people, these mechanisms perform less effectively than in others. This inherited influence accounts for a quarter of the variation in life expectancy figures. The rest is made up of differences in diet and lifestyle.
In the first half of the twentieth century, improvements in public health like fresh water and better diets had a great impact on longevity.
But later that century, a different factor - better medicine - took over, says Professor Raymond Tallis of Manchester University. 'For example, stroke has been a cause of widespread disability in this country,' he says.
'But in recent years, we have developed drugs that control cholesterol, begun to use anti-coagulants, like warfarin, and started to give low-dose aspirins that help keep our blood thin.' What is really exciting is that the percentage of the elderly who are capable of independent life has risen from 20 to 35 per cent.'
Population 'time bomb' disputed
Tuesday February 10, 2004
The charity Age Concern says recent research has debunked the myth that the ageing of Britain's population is a "demographic time bomb" threatening to wreck the economy.
Ministers are worried that, with the number of people aged 16-49 expected to fall by almost a million by 2021 and the number aged 50-69 to rise by 1.5m, there will not be enough workers to support the elderly.
But the charity says the problem could be solved by removing barriers to older people working if they wish. It commissioned a study which found that in 2001 there were up to a million older people who would have liked to re-enter the labour market. If the proportion of older people in work rose from 69% (in 2001) to 75% by 2021, national output would increase by £63bn - more than enough to cover the costs of demographic change.
Gordon Lishman, the charity's director general, said: "It is high time we lost our ageist attitudes, not our older workers."