Our ageing population
We are living longer. Fact. Around 700,000 people celebrate their 65th birthday each year in the UK, and, by 2024, there will be 18 million people over the age of 60 (https://www.ageing-better.org.uk/living-longer)
What are the challenges of this ageing demographic? Stewart Taylor shares his opinion on whether living longer is a good thing:
I’m sure I won’t be the only person who thinks that living much longer is not necessarily a good thing. Don’t get me wrong, I would sign up for eternal youth in a flash, but eternal life is a different thing altogether.
Being youthful is associated with being economically active, living life more energetically, free of the aches, pains and diseases associated with advancing years. Who wouldn’t want to look good, feel good and remain in their prime for eternity? Unfortunately, until we hit on the magic elixir that has evaded humans for centuries, that’s simply not possible.
Right now, like most of us, I’m expecting to live my allocated three score years and ten, perhaps a little longer in a fair wind. I’m a financial adviser so, as you would expect, I have made provision money-wise to ensure that I have enough to keep a roof over my head and can enjoy the free time that comes with retirement. I won’t have to rely on inheriting my parents’ estate or the financial good fortune and good nature of my children to keep body and soul together, or pay for nursing care when the time comes. If I live 30 years longer than I’m planning for, however, it could be a different story. That is unless we see greater innovation in social care, housing and active living policies to reflect the needs of an ageing society.
Retirement planning is a complicated process. Trying to guess how long you will live and plan financially for the life you want to lead when you’re done with the daily grind means, for most of us, making choices. Do we spend now, or save it for later?
Homeowners will be far better off in old age than those who continue to rent, and those who have taken good financial advice and have built up a private pension pot will be wealthier than those relying on diminishing state pensions.
Already young people are feeling a decline in real income and, at a time when the phrase ‘the bank of Mum and Dad’ has slipped into everyday language, the significance of parents becoming centenarians will inevitably slow down the passage of wealth to the next generation. The result being that fewer people in the future will be in the fortunate position of having enough income to be able to save.
The burden of increased spending on healthcare and pensions will fall to the shrinking working population who will have to pay higher taxes, leaving them with less disposable income and decreased capacity to either save for their own old age, or spend for the good of the economy. Add to that the declining birth rate and we have to ask who is going to support this ageing population, and what quality of life can we expect?
Our retirement intentions, and the retirement reality can be two very different things. If we want to live a healthy and active old age, studies show that we benefit from working longer and remaining active. The fact is, an octogenarian electrician with poor eyesight and arthritic joints is not physically able to work longer. The rise of artificial intelligence will also have an impact on gainful employment in years to come, and already the population is less active thanks to computerisation.
Government is hailing improved life expectancy as one of the great triumphs of the last century, and one of the great challenges of this one. An ageing population does present challenges, but it won’t be a crisis if improving health brings opportunities to work for longer, giving us all the chance to save for longer. We are already witnessing innovation in financial products with pension auto-enrolment, although, as a nation overall, we’re starting from a fairly weak position.
In my view, living significantly longer is not something to aspire to on its own. But if we can find the solution to living longer, happier and healthier lives, then I might change my mind.