How will Britain deal with an ageing population?

With widespread fall in fertility rates and significant rises in life expectancy, the median age of Britain’s population is rising. Today, for the first time in history, Britain’s over-65s now outnumber people under the age of 16.

This ageing population trend is being made worse by the inevitable retirement of the so-called baby boom generation over the coming decades. The baby boomers were born during a period of rapid population growth and social change between 1946-64, with 17m births  recorded in Britain alone during this period. Those born at this time are now beginning to reach retirement age and are set to have a dramatic effect on the people, society and the economy of Britain.

There are currently 4 people of working age supporting each pensioner in Britain, by 2035 this number is expected to fall to 2.5, and by 2050 to just 2. The number of people of working age in relation to retirees is known as the ‘dependency ratio’.

This ageing of populations is a global phenomenon, being witnessed not only in Britain but in such developed countries as Italy, Spain, Germany and Japan.

How will the NHS deal with the rapid growth of older people in Britain?

A main concern is that with the retirement of the baby boomers, the number of people of a working, taxable age will shrink or become stagnant. This could result in gaps in the jobs market, with businesses and public services lacking the workforce required.

With the elderly being the fastest growing age group in Britain, increasing pressure is being put on healthcare and social services. A report in 2005 said a key aim of government policy should be to encourage people to remain active, engage in regular exercise and refrain from behaviours that could have a detrimental effect on their health.

In a speech on NHS reforms in January 2008, the Prime Minister Gordon Brown discussed a change of emphasis to prevention rather than cure, and the need to ensure the NHS benefits from new and innovative technologies.

Personal savings is another potential dilemma; societies must save to be able to allocate funds for investment for the future, in such things as factories, offices, transportation, schools, energy and hospitals.


If older people don’t save or run down their savings while a smaller working age population does not save enough to compensate for the shortfall, then a shortage of savings could seriously affect economic performance.

What are the causes?

There are 2 mega trends that are at the root of the ageing of Britain’s population.

1. Rising longevity – people are living longer thanks to improvements in health, diet and preventative health care. During the 20th century the average life expectancy in Britain increased by 30 years.

2. Lower/declining birth rates – over the last 40 years women have been having fewer children, however in the last decade birth rates have risen slightly. Women in UK are currently having 1.9 children, the highest figure since 1973, but far lower than 2.93 in 1964.

The effect of the global economic crisis

The recent economic crisis and the downturn in the global economy has come at a particularly difficult time, affecting older citizens dependent on their own resources. It also risks delaying a comprehensive policy to managing the ageing of our society.

For individuals, the issues focus on the shortfall of retirement savings; the financial crisis is damaging equity and house values, and the collapse of interest rates in Britain is affecting those who had chosen to save over the past decades.

For society, a main concern is the provision of health and social care services, the nature of work and the workplace, and the investment made in education and lifetime skill formation. These all require further funding, whether from the tax system, other public expenditure savings, public-private initiatives or economic growth. The next few years are expected to be very difficult following the downturn in the global economy, and public spending in 2010/11 will be a challenge for the government.

For the economy, the challenge is to generate growth and financial resources needed to meet age-related spending needs. The rescue of the banking system has dramatically increased public debt. The question now is how will we cope with paying the bill for age-related spending?

Options / Solutions

The ‘maturing’ of global societies is certainly a major achievement, with people today living far longer and healthier lives than previous generations. This demographic change offers opportunities to harness the experience, expertise and creativity of such an historically large number of older people.

There are various options available to both government and private companies to deal with the ageing of Britain’s population. It is however, essential that now the best economic, social and political structures are developed to avoid a catastrophe.

The Age and Employment Network (TAEN) – say that this change in demographics provides great opportunity for businesses. Tapping into a wider pool of talent, experience and skills enables businesses to increase productivity, build competitive advantage and improve the bottom line.

Increasing the age of retirement is a politically and socially controversial policy. The UK government looks set to introduce this in the near future. Under current government policy, the state pension age for women will gradually rise from 60 to 65 between 2010 and 2020. For both men and women it will rise further, from 65 to 68, between 2024 and 2046.

Forcing people to save a proportion of their income has been suggested as a way of solving the UK’s pension crisis. Many people seem to favour this option, provided that their employers contribute as well.

Another option is to encourage higher labour force participation. In developed economies, a high percentage of men of working age tend to work, however participation rates are relatively lower for women and older workers aged 55-64.


Full-time employment
13.84m men
7.89m women

Part-time employment
1.87m men
5.68m women

— Office of National Statistics (ONS), January 2009

Special efforts will be required to make it more attractive for both women and older workers to stay on at work or to find economically useful and personally challenging work once they approach or pass the age of retirement.

A further option is the immigration of skilled labour, which can help boost the labour market in general or specific types of skilled labour. But Britain would be required to drastically increase its current level of immigration of economically active workers to offset the impact of demographic change. This could certainly add further stress to an already controversial area of political debate.