Britain’s ageing population made the headlines earlier this week when the Office for Budget Responsibility published its Fiscal Sustainability Report. The combined effects of increased healthcare needs, pension provision and fewer young taxpayers will, said the OBR, bring about an unsustainable increase in the national debt over the next 50 years.
It also said that increased immigration might be one way of easing the problem in the short-term, by adding more people of working age to the population. As you might expect, this caused a tremendous fuss even though the OBR didn’t say anything it hadn’t already said last year and the year before.
The OBR also pointed out that these problems are “far from unique” to the UK. They are right about that. Furthermore, these problems are not even unique to the rich western economies.
It’s a common theme in right-wing commentaries that the ageing population is a result of western liberal self-indulgence. On the wilder fringes of the right, it’s seen as part of a conspiracy by Marxists or Muslims (or sometimes both) to undermine western power. The reality, though, is that the entire world population is getting older. And, as I noted on Wednesday, many of the developing countries are ageing at a much faster rate.
This chart, based on data from the United Nations, shows the population aged over 60 for the G20 countries, plus a few others. It includes all those that are expected to outpace Britain and the other advanced economies over the next few decades.
Percentage of Population Over 60
Selected countries – 2012 and projected increase to 2050
Source: United Nations
The UN expects many of the emerging economies to experience a rapid increase in the proportion of people aged over 60. During the same period covered by the OBR’s report, some of these countries will catch the UK up or even overtake it. If these projections are right, by 2050, Vietnam, Iran and South Korea will have a higher percentage of 60+ year-olds than the UK with Brazil not far behind. Over a quarter of the populations of Mexico, Turkey, Indonesia and Argentina will be over 60.
Why should this be? Despite similar panics about decadence accompanied by calls for people to have more children (in Iran, apparently the ageing population is caused by a Zionist conspiracy rather than a Marxist or Muslim one) the causes of ageing populations are not all that different in emerging economies. As they get more prosperous, people have more choices, so some have fewer children but, more importantly, a lot more people live a lot longer. Brazil, Vietnam and Indonesia are achieving a level of prosperity that enables more of their people to live to a ripe old age.
As the OBR says, an ageing population means increasing pressure on public spending. It’s a problem that will face an increasing number of countries over the next few decades. By 2062, the end of the OBR’s projection period, the UK will be in good company. We will be one of many countries with a large proportion of people over 60.
The paradox of this increased health and longevity, of course, is that we will all have to work a lot longer, wherever we are in the world. It will also present a challenge to governments the world over; how do states which were designed with the assumption that few people would live into old age deal with populations where a quarter to a third are over 60?
The human race is about to embark on a great experiment. For most of human history, only a tiny proportion of people survived into their 60s. By the middle of this century, well over a billion will. This, then, is the context for the UK’s ageing population. For us and for many other countries it is way more than just a fiscal challenge.
Yesterday, the Lords attacked the government for its failure to prepare for the impact of an ageing population. To be fair, though, I suspect our leaders are not alone. This is a completely new challenge. There is no template. Britain is getting older and, like many other countries, we are going to need some clever thinking to deal with it.